In the latest news on May 3, 2024, American fitness equipment and media company Peloton announced on Thursday, May 2, that it will lay off 15% of its employees in a new round of job cuts, with CEO Barry McCarthy resigning.
The global interactive fitness platform company stated in a press release on Thursday that the board will seek a replacement for the CEO position. In the interim, board chair Karen Boone and director Chris Bruzzo will serve as co-acting CEOs.
This round of layoffs will affect 15% of the remaining employees in the company, approximately 400 members of the global team. This is the fifth round of layoffs by the social fitness platform company following the impact of the pandemic. Prior to this, McCarthy had stated during the first quarter earnings call in 2023 that the company had concluded its job cuts and that the “ship is turning around.”
In his resignation speech on Thursday, McCarthy expressed, “While further layoffs were a difficult decision to make, Peloton simply had no other way to align its expenses with its revenue.”
He noted that this was a crucial step the company was taking to seek debt refinancing. These layoffs are part of a 12-month restructuring plan for the company aimed at reducing future annual expenses by over $200 million.
Chief Financial Officer Liz Coddington stated that the departments most impacted by the restructuring will be Peloton’s research and development, marketing, and international teams.
McCarthy is a former executive of Netflix and the Swedish music streaming provider Spotify. Over two years ago, he took over the reins from the company’s founder, John Foley, and began a comprehensive reform of the company, including cutting thousands of jobs before this round of layoffs, adjusting management, and outsourcing the company’s business functions. He also tried to transform Peloton into more of a service-oriented company, positioning the company’s mobile app as the core of its business, rather than just a seller of expensive bikes and treadmills.
Following the news on Thursday, Peloton’s stock price fell by 16% to $2.71 on the New York Stock Exchange, marking the largest intraday decline since February. Even before this sharp drop, the stock had already fallen by 47% earlier this year.