Peloton CEO Barry McCarthy is stepping down as the company lays off about 15% of its staff, the company announced Thursday, the latest effort by the exercise bike company to cut spending amid growing concerns about cash flow.
The company said it moved forward with layoffs because it “simply had no other way to bring its spending in line with revenue.”
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Key Takeaways
- McCarthy will step down as president and chief executive and become a strategic advisor to the company through the end of the year, Peloton said.
- Chris Bruzzo and Karen Boone, the company’s chairperson, will serve as interim co-CEOs amid a search process for the next chief executive, according to Peloton, while Jay Hoag has been named the new chairperson of the board.
- Peloton said in a separate announcement it will lay off about 15% of its global workforce, or 400 employees, as the company hopes to reduce annual spending by more than $200 million by the end of the 2025 fiscal year.
- In a memo to its staff, Peloton said it moved forward with layoffs because it “simply had no other way to bring its spending in line with its revenue,” according to CNBC.
- Shares of Peloton rose by over 11% to $3.58 in premarket trading as of 8:05 a.m. ET.
Surprising Fact
Peloton’s share price decreased by over 91% between February 9, 2022, the day after McCarthy was named chief executive, and Wednesday.
Key Background
McCarthy was named Peloton’s chief executive in 2022, replacing founder John Foley shortly after the company reported $439 million in losses while laying off thousands. McCarthy, the former chief financial officer of Spotify, joined the company following a burst of revenue during the pandemic, which sharply declined as eased Covid restrictions lowered demand for the company’s bikes. The company said at the time it overestimated demand for its bikes and treadmills and planned to temporarily halt production.
This article was first published on forbes.com and all figures are in USD.
