Peloton will replace its CEO and cut nearly 2,800 jobs.

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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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