Peloton is changing its CEO and cutting some 2,800 jobs worldwide in a bid to shake up its business as demand for its pandemic-powered exercise equipment slows.
In a note sent to employees and posted on Peloton’s website on Tuesday, co-founder and CEO John Foley said he would become CEO and that Barry McCarthy, a former CEO at Spotify and Netflix, would take over as CEO director on Tuesday. The company’s president, William Lynch, will step down and become a “non-executive director” on the Peloton board.
Foley said in a note that Peloton would provide “significant cash benefits” to redundant employees “based on Peloton’s level of work and experience.” For those on company benefits, Peloton will extend healthcare coverage “for a period of time,” Foley said.
Peloton will also reduce production operations and reverse the course his plan to factory in the United Statessaid Foley.
The pandemic boom in home training gave Peloton a serious boost, but the momentum faded dramatically. Shares of the company fell about 31% in this fiscal year from Monday, although shares rose slightly on Tuesday after the news.
Several companies reportedly expressed interest in buying Peloton, including Amazon. A report in The Wall Street Journal says the buyer will benefit from the transaction by gaining access to data from millions of Peloton users.
Peloton declined to comment outside the note to employees.