Peloton plans to lay off 400 employees with the departure of CEO Barry McCarthy

Image credits: Michael Nagel/Bloomberg/Getty Images

said Peloton, a maker of exercise equipment and provider of online fitness courses It’s a layoff 15% of its workforce (about 400 people) as part of cost-cutting measures. The company also said that its CEO, president and board director, Barry McCarthy, He will step down After two years in this role.

McCarthy, who previously served as CFO at Spotify and Netflix, was forced to retire in early 2022 when Peloton co-founder and then-CEO John Foley left his position alongside a major cost-cutting effort that led to 2,800 layoffs. Foley remained CEO, but left the company after seven months along with co-founder and chief legal officer, Hisao Koshi.

Peloton says it is in the process of finding a successor to McCarthy, and Peloton’s current president, Karen Boone, and director, Chris Brozo, will serve as interim co-CEOs during the transition.

Peloton went public in 2019 at an opening valuation of $6 billion, and saw its fortunes soar when the pandemic hit. As the world stayed at home, and people looked for ways to stay healthy through home exercise equipment, the company’s bikes and online courses nearly flew off the shelves, eventually earning it a market value of $50 billion by early 2021.

But when the world returned to normal, so did Peloton shares, and its market value fell to $10 billion in January 2022, a year after its peak.

Today, the company’s market capitalization in New York is just over $1 billion. However, its shares rose about 13.3% in premarket trading Thursday morning, apparently supported by Peloton saying it would cut costs.

Aside from reducing its headcount by 15%, Peloton said it also intends to continue to reduce its physical footprint in retail showrooms, and double its international growth through a more “targeted and efficient” go-to-market strategy. . All of these steps are expected to help it reduce annual expenses by more than $200 million by the end of its fiscal year 2025.

These announcements came just before Peloton It reported worse-than-expected revenues and losses in the third quarter of 2024A 21% decrease in paid application subscriptions compared to the previous year. When the company reported second-quarter results in February, its shares fell 24% to an all-time low. After continuing reports Declining revenues and bleak outlook for the coming months.