Peloton to Lay Off 400 Employees Globally; CEO McCarthy Resigning

Peloton, the popular fitness technology company, is facing major changes as it announces a significant restructuring effort that includes cutting about 400 jobs worldwide and the departure of CEO Barry McCarthy. The news sent shares tumbling 12% to $2.81.

The New York-based company, known for its luxury exercise bikes and interactive workouts, has been undergoing a rebranding since last year to focus on health technology for all. Despite experiencing a surge in sales during the pandemic, Peloton has seen a slowdown in 2021 as people return to gyms and outdoor activities.

The company reported significant losses, with a $1.26 billion loss in the fiscal year ended in June and an additional $350 million loss in the six months ended in December. The latest quarterly results fell short of analysts’ expectations, with a loss of $167.3 million and revenue below Wall Street estimates.

The job cuts, which amount to approximately 15% of Peloton’s global headcount, are part of efforts to reduce annual expenses by more than $200 million by fiscal 2025. This is not the first round of layoffs for the company, as it previously cut about 500 jobs in October 2022 and nearly 800 in August of that year.

McCarthy, who took over as CEO two years ago, will step down from his positions but remain with Peloton as a strategic adviser. Interim co-CEOs Karen Boone and Chris Bruzzo will lead the company while a search is conducted for a new CEO. Jay Hoag will take over as chairperson of the board.

In a note to Peloton’s team, McCarthy acknowledged the difficulty of the decision but emphasized the need to align spending with revenue. The company is facing challenges as it navigates a changing market and works to regain its financial footing.