(TheLibertyRevolution.com)- Peloton is undergoing a significant change, with massive layoffs and a new CEO coming on board.
This week, John Foley announced that he would be stepping aside as the chief executive officer of the luxury fitness company. While he’ll continue to serve the company as executive chairman, the company will have a new CEO — Barry McCarthy, who once served as the CFO for Netflix and Spotify.
In addition, Foley announced in an email to staff members that the company would be cutting roughly 2,800 jobs, or 20% of the company’s overall workforce. This is all happening as the company is working hard to increase their profitability at a time when its value in the stock market has plunged.
In the email he sent to the Peloton staff, Foley wrote:
“After careful review, we’ll be driving strategic initiatives across our global team that will help us focus on areas that are in need of adjustment … including implementing a comprehensive restructuring program.”
At the outset of the pandemic, demand for Peloton’s expensive at-home fitness equipment was high. With gyms closed, people still desired excellent fitness equipment and a chance to connect with others.
Peloton’s at-home fitness machines did just that — connecting people with others through live classes that were streamed through the equipment.
But, as the pandemic waned, demand for their equipment did as well. People no longer could justify the extremely high prices of the equipment itself, in addition to the high monthly subscription rate for the classes — especially when gyms were back open again.
Adding insult to injury, the company experienced a significant drop in its stock after a character in the HBO Max show “And Just Like That” died from a heart attack after riding on a Peloton machine.
In the past six months, the company’s stock has dropped 68.10% as of Wednesday morning, and 74.83% over the past 12 months.
In announcing the massive restructuring of the company, Foley insisted that the cuts in jobs wouldn’t affect the content Peloton provides or the instructors it features through its platform.
Foley added that while the layoffs would begin this week, all employees who are let go would be provided various benefits that include healthcare, compensation and also assistance with transferring to a new job.
In addition to the staffing shake-up, Peloton announced it would also “wind down” the plan the company had to build what was known as the Peloton Output Park. That was a factory the company built that would be dedicated to producing products for Peloton.
Instead of producing the units there, the company would rely on partners to “support our growth over the next few years,” Foley said.
In an interview with the Wall Street Journal, the now-former CEO said:
“I have always thought there has to be a better CEO for Peloton than me. Barry is more perfectly suited than anybody I could’ve imagined.”
There are also reports that major companies such as Nike and Amazon could be interested in eventually acquiring Peloton, a notion Foley didn’t directly shoot down in his interview. He said:
“We are open to exploring any opportunity that could create value for Peloton shareholders.”