New York-based Peloton Interactive, Inc., whose luxury fitness equipment lent cache to at-home exercise as sales soared during the COVID-19 pandemic, said Thursday it will cut 400 jobs worldwide — 15% of its workforce — and replace its CEO.
Most of the cuts will come from Peloton’s research and development, marketing, and international teams, Peloton Chief Financial Officer Liz Coddington told CNBC.
Leaving is chairman and CEO Barry McCarthy, who took the reins from co-founder John Foley in 2022 in an attempt to stabilize the company amid wobbly post-pandemic sales. Board members Karen Boone and Chris Bruzzo are tapped as interim co-CEOs, while Jay Hoag will be the board of directors’ new chair, the company said.
Sales had skyrocketed in 2020, quintupling the company’s share price as homebound fitness buffs plunked down monthly money for interactive workouts on high-end treadmills and stationary bikes.
But amid declining post-pandemic sales, McCarthy — a former Netflix and Spotify executive — cut 800 jobs within just months of taking over.
McCarthy last year began rebranding to lean less on luxury exercise bikes and more on peddling health technology software to make its product accessible to more people via apps. Nonetheless, the fiscal year ending last June saw a $1.26 billion loss, with $350 million more by December.
Peloton on Thursday announced “comprehensive restructuring efforts to align the company’s cost structure with the current size of its business,” it said in an earnings statement, noting the measures would cut annual expenses by more than $200 million by the end of the next fiscal year.
Besides cutting staff, the company will further reduce its retail showroom footprint and “reimagine” its marketing strategy. But it’s not clear whether the tactics will work.
“Somebody needs to acquire them, because at this rate I don’t even know if this company will still be a company on its own in the future,” Paul Cerro, Chief Investment Officer at Cedar Grove Capital Management, told Reuters after the changes were announced.
With News Wire Services
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