Peloton has grown tremendously during the COVID-19 pandemic, but now that things are opening up, it’s struggling to sustain its growth. Today, the company is shaking things up by replacing its CEO, reshuffling the board and laying off about 20% of its workforce, according to the Wall Street Journal.
CEO and co-founder John Foley is stepping down as CEO to become executive chairman and will be replaced by former Spotify chief operating officer Barry McCarthy, the company told the WSJ. McCarthy would bring his understanding of content-driven subscription models to Peloton. “I always thought there had to be a better CEO for Peloton than me,” Foley said. “Barry is more perfectly suited than anyone I could have imagined.” On top of that, the company is cutting around 2,800 positions.
In addition to its financial struggles, Peloton has been hit with bad press regarding equipment safety, unpaid employees, and even not-so-positive mentions on recent TV shows. As the company’s value fell from a high of $50 billion to around $8 billion last week, it has been the subject of takeover rumors from Amazon, Nike and even from Apple.
Peloton will discuss its plans for dealing with the crisis in more detail when it releases its second quarter results later today. It is expected to cut costs by $800 million and halt development of its $400 million factory in Ohio, among other changes.
the company reported $1.14 billion in revenue in January, preliminary to the second quarter and said it had 2.77 million subscribers. Its earnings call is set for 5:00 p.m. GMT today.
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