Peloton CEO Barry McCarthy has announced his resignation, with the company revealing plans to cut 15% of its workforce due to a decrease in demand for its connected fitness equipment following the pandemic. The New York-based company’s shares saw an 8% increase prior to market open after revealing intentions to scale back retail operations until demand picks up again. Karen Boone and Chris Bruzzo will step in as interim co-CEOs, with Jay Hoag serving as board chairperson.
In a statement, McCarthy acknowledged the difficult decision to reduce headcount, citing the necessity for the company to align spending with revenue. Despite setbacks, McCarthy expressed confidence in Peloton’s future with the current leadership team in place. The board is currently in the process of selecting the next CEO following McCarthy’s departure.
Peloton saw a surge in sales during the pandemic with gym closures prompting more individuals to seek at-home fitness solutions. However, sales declined as restrictions lifted, leading McCarthy to implement cost-cutting measures in an attempt to transform Peloton into a subscription-based model. The company, once valued at over $50 billion, is now worth $1.1 billion.
McCarthy, known for his previous roles at Netflix and Spotify, took over as CEO of Peloton in early 2022. Despite various strategies introduced under his leadership, including partnerships with major brands and a shift towards corporate wellness, Peloton has continued to face financial challenges. The company reported its ninth consecutive quarter of declining revenues, with losses totaling $167.3 million in the last quarter.