Peloton will replace its CEO, John Foley, overhaul its board, and cut thousands of jobs as it looks to reverse a severe downturn in its business.
Foley, who has faced widespread criticism over his leadership in recent months, will stay with Peloton as its executive chairman of the board. He co-founded Peloton and had served as CEO since its debut.
Barry McCarthy, the former CFO of Spotify and Netflix, will replace Foley as Peloton’s CEO. He will also join the connected fitness company’s board of directors.
“Barry is an incredible leader who has held senior executive roles at Spotify and Netflix and is a longtime advisor and board member at public and private technology companies,” Foley said in an open letter. “This appointment is the culmination of a months-long succession plan that I’ve been working on with our Board of Directors, and we are thrilled to have found in Barry the perfect leader for the next chapter of Peloton. I look forward to working with him and invite you to welcome him with open arms.”
Peloton will reduce corporate staff by about 20 percent. The company is also winding down Peloton Output Park, a factory that was scheduled to churn out Peloton machines in Ohio by 2023.
“With regard to operations in the field, the company is reducing its owned and operated warehouses and delivery teams and expanding its commercial agreements with third-party logistics providers,” the company added. In return, Peloton expects to save at least $800 million USD in annual costs.
Despite the cost-cutting measures, the company said: “Peloton’s roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today.”
“Our objective is clear: we are taking steps to best position Peloton for sustainable growth, while also establishing a clear path to consistent profitability,” Foley wrote.