Peloton, known for its exercise equipment and online fitness classes, has revealed plans to lay off 15% of its workforce, totaling 400 employees. This move comes alongside the departure of CEO, president, and board director Barry McCarthy, who took on the role two years ago after serving as CFO at Spotify and Netflix.
McCarthy’s tenure began in early 2022 when Peloton’s co-founder and then-CEO John Foley stepped down as part of a significant cost-cutting initiative that led to 2,800 job cuts.
The company is actively searching for McCarthy’s successor, with Karen Boone, the current Peloton chairperson, and director Chris Bruzzo stepping in as interim co-CEOs during this transition period.
Peloton, which went public in 2019 and saw a meteoric rise in valuation to $50 billion by early 2021, faced challenges as pandemic-induced demand waned. Its market cap has since dropped to just over $1 billion. Despite this, Peloton’s shares have seen a pre-market increase of nearly 8% following news of its cost-cutting measures.
In addition to reducing its workforce, Peloton plans to further scale back its physical retail presence and focus on international expansion through a streamlined strategy.
These announcements precede Peloton’s upcoming Q3 2024 financial report, following a previous earnings report that saw a 24% drop in share value amid revenue declines and a cautious outlook.