Peloton Interactive, the digital video-fitness-subscription and
equipment company, is making major changes -- replacing its chief executive officer, cutting costs, and laying off 2,800 -- around 20% of its workforce.
John Foley, longtime chief
executive officer, will be replaced by Barry McCarthy, former chief financial officer of Spotify and Netflix. McCarthy will become president and CEO of the company. Foley will remain as executive
chairman of Peloton’s board.
Peloton also says it plans to cut $800 million in annual costs.
Peloton witnessed a sharp spike in business during the
COVID-19 pandemic when people were unable to go to health clubs and gyms. Peloton ramped up efforts in manufacturing, especially around its expensive Peloton bike and then its Peloton
treadmill.
But over the last several months, as COVID-19 pandemic issues have subsided, growth for the company has stalled.
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The company now says it will have
three million connected fitness subscribers. Previously it projected around 3.35 million and 3.45 million. Overall, it has 6.6 million members.
The company’s stock has
declined nearly 80% year-over-year.
In recent days, there have been reports that Amazon and Nike could be possible takeover candidates for the company. Over the last five days its
stock price has climbed 19% to $33.53.