Peloton co-founder and chief executive John Foley will step down as the company plans to cut thousands of jobs after slowing demand caused a significant decrease in the bike manufacturer’s market value, The Wall Street Journal reported.
Foley will step down from his position and become the company’s executive chairman, according to the WSJ. Barry McCarthy, former chief financial officer of Spotify and Netflix, will reportedly take over as chief executive and president of Peloton’s board.
The bike giant will also slash 2,800 jobs, or roughly 20% of its positions, to combat the dip in demand, the WSJ reported. Workout instructors and programs reportedly won’t be affected by the job cut.
Activist investor Blackwells Capital LLC previously called for Foley to step down and consider selling the company, the WSJ reported. Amazon is among the companies reportedly interested in purchasing the New York-based bike giant.
“We are open to exploring any opportunity that could create value for Peloton shareholders,” Foley said in an interview, the WSJ reported.
Peloton slashed its outlook for 2022, announcing predicted 2022 revenue of around $3.8 billion, CNBC reported. The company previously targeted revenue between $4.4 billion and $4.8 billion for 2022.
The company cut its subscriber expectations to roughly 3 million from its previous estimate of at least 3.35 million, CNBC reported.
“We are taking steps to best position Peloton for sustainable growth, while also establishing a clear path to consistent profitability,” Foley wrote in a letter to shareholders obtained by CNBC.
Peloton’s value has plummeted from a high of roughly $50 billion in 2021 to only $8 billion as of early February. Shares surged 21% after Foley stepped down, according to the WSJ.
“I have always thought there has to be a better CEO for Peloton than me,” Foley told the WSJ. “Barry is more perfectly suited than anybody I could’ve imagined.”
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