Peloton to replace chief executive and cut 2,800 jobs amid sales slump

theguardian.com:

Peloton, the troubled exercise equipment company, is replacing its chief executive and planning to axe 2,800 jobs as it deals with a post-pandemic sales crash.

Co-founder John Foley, who has led the company for its entire 10-year existence, will step down as chief executive and become executive chair, the company told the Wall Street Journal, while the company will cut about 20% of corporate positions.

The move comes weeks after activist investor Blackwell Capital called for Peloton to fire Foley and explore a sale of the company. Amazon and Nike have reportedly expressed interest.

Barry McCarthy, former chief financial officer of Spotify and Netflix, will become chief executive and president and join Peloton’s board, according to the Journal.

Peloton became one of the highest-profile successes of the pandemic as people canceled gym memberships and bought its exercise bikes and treadmills to work out from home.

Investors snapped up shares and the company was valued at $50bn in January 2021. But as the pandemic waned, sales slipped and a series of incidents left the company’s shareholders feeling jittery.

Last May, Peloton recalled its two treadmills after the death of a child and dozens of other injuries.

In November, the company reported sales in 2022 will be up to $1bn lower than expected. In December, Peloton’s shares collapsed again following the on-screen death of the Sex and the City character Mr Big while riding a Peloton in the series reboot, And Just Like That.

Peloton is currently valued at about $9bn, having risen in value on speculation of a takeover.