Peloton appoints new CEO, announces layoffs of 2,800 employees

Peloton is currently in the midst of a broad shake-up, with the company appointing a new CEO and announcing that it would cut its corporate workforce by about 20%.

The fitness hardware company announced on Tuesday that it would replace CEO John Foley with Barry McCarthy, the former chief financial officer of Spotify and Netflix. McCarthy will take over as CEO effective Wednesday, CNN has reported.

Peloton president William Lynch is also stepping down from his role and will also be replaced by McCarthy,

In addition to the new chief executive, Peloton also said that it would be cutting about 20% of its corporate workforce. That amounts to about 2,800 employees in total. It is also scaling back warehousing and delivery operations.

"This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline," Peloton wrote in a press release Tuesday.

Employees who are laid off will receive a one-year digital subscription to Peloton as part of their severance package.

According to Bloomberg, other top executives are also leaving Peloton as part of the shake-up, including Sam Bowen, senior vice president of hardware, and Rob Barker, a commercial operations SVP.

The sweeping changes announced Tuesday comes after Peloton lost nearly 80% of its value in 2021 and came under pressure from an activist investor.

Peloton shares increased as much as 36% in intraday trading on Tuesday as some investors see the shake-up as setting the company up for a sale.

Earlier in February, Amazon was said to be in talks to purchase Peloton. Some financial analysts have also floated a potential Apple acquisition of the fitness maker as a way for the Cupertino tech giant to boost its health and wellness hardware offerings.

24 Comments

cg27 221 comments · 18 Years

About 2 years ago

So prior to the cuts Peleton has over 10,000 employees? If that’s the case they’re beyond bloated. There are successful EV startups that have fewer employees than that. This is just a dumb bike with some app and personal trainers, not exactly rocket science.

Even if the article means to say 2800 remain that’s still a ton of overhead, for what??

hmlongco 580 comments · 9 Years

Yes, but did the departing CEO also get a free one-year Peloton subscription???

I mean, in addition to his pre-negotiated multi-million dollar severance package...

Xed 2871 comments · 4 Years

cg27 said:

So prior to the cuts Peleton has over 10,000 employees? If that’s the case they’re beyond bloated. There are successful EV startups that have fewer employees than that. This is just a dumb bike with some app and personal trainers, not exactly rocket science.

Even if the article means to say 2800 remain that’s still a ton of overhead, for what??

That's a lot of odd statements. Because there are successful EV startups with fewer employees anyone who has more than the lowest has too many? are you aware that startups have few employees than established companies? Are you aware that Peloton does more than "dumb bikes"? How many employees did Amazon and Google have when they were just an online store and just a search engine?

Fitness companies come and go. Peloton will likely still have its niche but this pandemic boost was always going to be short-lived.

MplsP 4020 comments · 8 Years

Xed said:

Fitness companies come and go. Peloton will likely still have its niche but this pandemic boost was always going to be short-lived.

Peloton had a niche and a devoted following before the pandemic; the pandemic just pushed a lot of people onto the platform - I (and my family) am a perfect example.

I think there will be some attrition but there will also be many people who stay. At this point I can't imagine going back to our membership at the gym. We use the peloton far more than we ever did our gym membership and after the bike is amortized it is far cheaper.

Xed said:

cg27 said:

So prior to the cuts Peleton has over 10,000 employees? If that’s the case they’re beyond bloated. There are successful EV startups that have fewer employees than that. This is just a dumb bike with some app and personal trainers, not exactly rocket science.

Even if the article means to say 2800 remain that’s still a ton of overhead, for what??

That's a lot of odd statements. Because there are successful EV startups with fewer employees anyone who has more than the lowest has too many? are you aware that startups have few employees than established companies? Are you aware that Peloton does more than "dumb bikes"? How many employees did Amazon and Google have when they were just an online store and just a search engine?

Agreed, but I also think they were likely overstaffed.