Home fitness firm Peloton will oust its chief executive and slash thousands of jobs as part of sweeping cost-cutting plans amid falling demand for its fitness products.
In a trading update today, boss and co-founder John Foley said he will step down as CEO and become the executive chair, while Barry McCarthy, the former chief financial officer of Spotify and Netflix, will become the new head.
Foley also said Peloton would be implementing “a meaningful reduction of our workforce” at all levels which would see 2,800 positions slashed globally. including 20 per cent of its corporate position.
In its second quarter trading update the firm again slashed its outlook for the full year and now anticipates $3.7 billion to $3.8 billion in total revenue, below the lowered forecast for $4.4 billion to $4.8 billion that the company outlined in early November.
The overhaul comes after activist investor Blackwells Capital piled pressure on the firm last month to change its leadership and target a sale after it was revealed that Peloton had cut back production of its flagship exercise bike amid falling demand.
The firm has been grappling with a plummeting share price in recent weeks but it has seen an uptick in recent days after rumours spread that Amazon and Nike were exploring a takeover.
Shares in the firm surged over 25 per cent yesterday after the plans were revealed.
However, it was unable to maintain its popularity as restrictions were lifted and some glimmer of normality returned.
Peloton’s shares fell 83 per cent in the last year, valuing the company at $9.7bn (£7.2bn), compared to its 2020 boom of $50bn (£37bn).