In response to a slowdown in demand that has caused the once-hot bike maker's value to plunge, Peloton Interactive plans to replace its chief executive, cut costs, and overhaul its board of directors.
In addition to becoming CEO and president, Barry McCarthy will also join the board of directors of Peloton. McCarthy is known to have previously served as CFO of Spotify Technology SA and Netflix Inc.
John Foley is reportedly stepping down on his position as CEO in Peloton and instead position himself as executive chair.
Foley is not just the CEO of the company for 10 years--he is also one of the people who co-founded Peloton. On the other hand, accounting for approximately 20% of its corporate positions, the New York-based company will eliminate approximately 2,800 positions.
This layoff is also one of the company's decisions to cope with the decline in demand and widening losses.
However, the reductions will have no impact on Peloton's instructor roster or content.
In an additional effort to cut costs, the $400 million factories Peloton is supposed to build this coming May in Ohio will be halted as well.
Decreasing Profit Value
During the COVID-19 lockdowns, the company's sales increased dramatically, with many customers purchasing home fitness equipment. However, as vaccinations became more widespread, gyms reopened, and competitors introduced competitive products, fortunes began to wane.
According to a report by Reuters, investment firm Blackwells Capital has urged the company's board to fire its chief executive officer and put the company up for sale.
On top of that, it has also urged the board to sell the company to a buyer such as Walt Disney Company, Apple Inc., Sony Group, Nike Inc., and Amazon.
Furthermore, the world's largest online retailer has expressed its interest in purchasing the company.
Changes in Peloton To Restructure
Peloton has stated that it intends to reduce costs while also examining the size of its workforce and production levels in the near future. Investors have been waiting for more information on the company's plans.
The Wall Street Journal reported that during an interview, Mr. Foley stated that the company was "open to exploring any opportunity that could create value for Peloton shareholders."
Investors have been waiting for more information on the company's plans.
The company's co-founder, Mr. Foley, a former Barnes & Noble Inc. executive who co-founded Peloton ten years ago last month, declined to comment further.
Peloton has stated that it intends to reduce costs while also examining the size of its workforce and production levels in the near future.
For some time, the company had been contemplating hiring a new CEO, as stated by Foley and McCarthy.
Fortunately enough, that is when McCarthy had only recently entered the conversation.
Foley clarified that Barry replacing the CEO job post is a better match for him than anyone he could have imagined.
In addition, he also stated that he has always believed that there must be a better CEO for Peloton other than him.
