Peloton has announced a major shakeup in its leadership and operations as it looks to cut costs and turn the business around.
The fitness technology company announced Thursday it is planning to cut about 15% of its global workforce, which will result in roughly 400 layoffs. CEO Barry McCarthy is also stepping down after two years, effective immediately.
McCarthy will be succeeded by Peloton chairperson Karen Boone and director Chris Bruzzo, who will serve as interim co-CEOs as the company searches for a permanent top executive. Board member Jay Hoag will take over as the company's new chairperson.
Peloton said the moves are part of a restructuring effort to position the company for "sustained, positive free cash flow."
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The job cuts come after Peloton announced in October 2022 it was laying off approximately 500 employees in addition to the 800 job cuts it made two months prior. The company said it anticipates this latest round of cuts will lower expense by more than $200 million by the end of the 2025 fiscal year.
Following the announcements, shares in the company spiked by more than 11% ahead of market open Thursday morning.
The New York-based company saw sales of its stationary bikes and treadmills skyrocket at the height of the COVID-19 pandemic, when lockdowns left many American's stuck at home looking for ways to stay fit. However, sales began to plummet in 2021 as gyms reopened and people were able to return to their pre-pandemic lives.
Peloton reported an annual net loss of just over $1.2 billion in the fiscal year that ended last June. Meanwhile, the company said it had a free cash flow of negative $470 million in fiscal year 2023 after paying all costs to run the business.
