After a prolonged period of turmoil at the fitness and treadmill firm, Peloton’s co-founder is stepping down as CEO.
In 2011, John Foley proposed the notion of an interactive exercise bike, seeking to shake up the fitness sector. He will step down as CEO of Peloton Interactive Inc. and become executive chair.
Barry McCarthy, who formerly worked at Spotify and Netflix as CFO, will take over as CEO.
Peloton was mentioned in the media this week as a possible acquisition target by either Amazon or Nike. The discoveries on Tuesday dashed expectations for such a wealthy buyer, and Peloton’s stock dropped 7% before the opening bell.
Since the outbreak, the company’s stock has been on a roller-coaster ride. As a result of COVID-19 forcing lockdowns and shifting the fitness trend from the gym to the house, they increased by more than 400% in 2020.
As companies reopened and people returned to gyms, the shares took up virtually all of their gains in 2021. The stock has dropped even further this year as rumours surfaced that the business might reduce manufacturing of bikes and treadmills to combat a drop in sales.
Late last month, activist investor Blackwells Capital demanded that Peloton fire Foley as CEO and explore selling the firm due to dwindling consumer demand.
Peloton also announced 2,800 job layoffs throughout the world, including around 20% of corporate employment in New York City. The instructors who conduct Peloton’s interactive lessons, as well as the content that the firm uses to attract consumers, will not be affected by the changes.
Peloton is aiming to cut $150 million from its budgeted capital expenditures this year. The restructuring program is estimated to result in cash charges of $130 million for severance and other departure and restructuring operations, as well as non-cash charges of $80 million. In fiscal 2022, the majority of the charges will be recorded.
Once its efforts are completely executed, the corporation expects to save at least $800 million each year.