Peloton will lay off 400 employees amid the departure of CEO Barry McCarthy

The 15% staff cuts are part of a wider cost-cutting effort

Peloton, exercises equipment manufacturer and provider of online fitness courses, he said it’s slowing down 15% of the workforce (roughly 400 people) as part of cost reduction measures. The company also announced that its CEO, president and director of the board, Barry McCarthy: he would relent after two years on this position.

McCarthy, who previously served as chief financial officer at Spotify and Netflix, was forced to retire in early 2022 when Peloton co-founder and then-CEO John Foley left his position as part of a sweeping cost-cutting effort. consequently of which 2,800 employees were dismissed. Foley remained as executive chairman, but seven months later he left the company together with co-founder and chief legal officer Hisao Kushi.

Peloton says it’s in the process of finding McCarthy’s successor, and current Peloton chairwoman Karen Boone and executive Chris Bruzzo will function interim co-CEOs during the transition.

Peloton went public in 2019 with an initial valuation of $6 billion, and its fortune skyrocketed after the pandemic hit. As the world settled into homes and other people looked for tactics to remain healthy with home exercise equipment, the company’s bikes and online courses virtually disappeared from shelves, ultimately giving it a market capitalization of $50 billion in early 2021.

But when the world returned to normal, Peloton’s stock also returned to normal, and its market capitalization fell to $10 billion in January 2022, a 12 months after its peak.

Currently, the New York-based company’s market capitalization is just over $1 billion. Still, the company’s shares were up about 13.3% in pre-market trading on Thursday morning, apparently driven by Peloton’s announcement that it might cut costs.

In addition to cutting its workforce by 15%, Peloton said it also intends to further reduce its footprint in retail showrooms and double its international growth with a more “targeted and effective” go-to-market strategy. Together, these steps are expected to assist the company reduce annual expenses by greater than $200 million by the end of fiscal 12 months 2025.

These announcements got here just before Peloton reported worse-than-expected revenues and losses for the third quarter of 2024and a 21% decline in paid app subscriptions in comparison with the previous 12 months. When the company announced its second-quarter ends in February, its shares fell 24% to an all-time low continued after reporting decline in revenues and dismal prospects for the coming months.