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Peloton announces 400 layoffs, 15% of its workforce, as CEO Barry McCarthy leaves

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Peloton announces 400 layoffs, 15% of its workforce, as CEO Barry McCarthy leaves

Platoonthe fitness equipment maker and creator of online fitness classes, has has announced it is closing 15 percent of the workforce – 400 people – as CEO, president and board director Barry McCarthy steps down after two years in the role.

McCarthy, previously CFO at Spotify and Netflix, was forced to retire in early 2022 when Peloton co-founder and then-CEO John Foley resigned as part of a major cost-cutting effort that laid off 2,800 employees. Foley stayed on as executive chairman, but left the company seven months later along with co-founder and chief legal officer Hisao Kushi.

Peloton says it is in the process of finding a successor to McCarthy, with current Peloton chairman Karen Boone and director Chris Bruzzo serving as interim co-CEOs during the transition.

Peloton went public in 2019 and went from an opening day valuation of around $6 billion to a $50 billion company in early 2021. The company was one of the biggest beneficiaries of the global pandemic as the world sat at home searching for ways to stay healthy. via expensive home fitness equipment, including bicycles and treadmills. As the world returned to normality, so did Peloton’s shares, which plummeted to $10 billion in January 2022, a year after the peak.

Today, the company’s market cap is just over $1 billion, but shares are up nearly 8% in premarket trading as news of Peloton’s cost-cutting measures emerges. In addition to reducing its workforce by 15%, Peloton said it also plans to further reduce its physical footprint in retail showrooms and double its international growth with a more “targeted and efficient” go-to-market strategy. .

These announcements come as Peloton prepares to release third-quarter 2024 financials later today. At its previous earnings call in February, Peloton shares fell 24% to an all-time low after reporting continued decline in turnover and gloomy prospects for the coming months.