Peloton CEO to step down, company will cut 15% of global workforce
Peloton CEO Barry McCarthy is stepping down from the beleaguered high-end fitness company after just over two years in the role, the company announced Thursday.
Peloton CEO Barry McCarthy is stepping down from the beleaguered high-end fitness company after just more than two years in the role, the company announced Thursday.
His departure comes as the company is planning to cut about 15% of its global workforce, or about 400 employees, to lower costs.
Karen Boone, who is the current Peloton chair, and Chris Bruzzo, a Peloton director, will serve as interim co-CEOs while the board conducts a search for McCarthy's permanent replacement.
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McCarthy, who took the reins from former CEO John Foley in February 2022, will become a strategic adviser to Peloton through the end of the year.
Bruzzo commended McCarthy for his contributions during "an incredibly challenging time for the business." He credited McCarthy for helping the company achieve positive free cash flow and getting it "on solid footing."
Following a surge in business during the pandemic, the company faced mounting losses when social distancing restrictions eased and people went back to gyms. It was forced to lay off hundreds of employees, raised the prices of its equipment, outsourced manufacturing to a Taiwanese company and started to sell its products outside its stores at Amazon and retailers like Dick's Sporting Goods, to attract more customers.
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It also made its app more accessible by offering more membership tiers and offering many classes for free.
Recently, under McCarthy, the company forged partnerships with Hyatt and Lululemon. Still, the company said it's still trying to align its cost structure with the current size of its business.
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The restructuring will "position Peloton for sustained, positive free cash flow," the company said. It will also enable it to continue to invest in software, hardware and content innovation and improvements to its member support experience, as well as optimize marketing efforts.
Peloton expects to reduce expenses by more than $200 million by the end of fiscal year 2025.