Peloton is replacing its CEO and cutting around 2,800 jobs globally in an attempt to shake up its business as pandemic-fueled demand for its exercise equipment slows.
The company employed 8,976 people as of Sept. 30. The cuts represent over 30% of Peloton's workforce.
In a note sent to employees and posted to Peloton's website on Tuesday, co-founder and CEO John Foley said that he will become the company's executive chair and that Barry McCarthy, a former executive at Spotify and Netflix, will take over as CEO effective Tuesday. Company president William Lynch will leave his role and become a "non-executive director" on Peloton's board.
Foley said in the note that Peloton will provide "a meaningful cash severance allotment" to the laid-off employees "based on job level and tenure with Peloton." For those enrolled in company benefits, Peloton will extend health care coverage "for a period of time," Foley said.
Peloton will also scale back manufacturing operations and reverse course on, Foley said.
The pandemic home-workout boom provided Peloton with a major boost, but the momentum has faded drastically. The company's stock is down around 31% this fiscal year as of Monday, though stock is slightly up Tuesday following the news.
Several companies have reportedly expressed interest in buying Peloton, report from The Wall Street Journal said a buyer would benefit from the transaction by getting access to data from Peloton's millions of users.. A
Peloton declined to comment beyond the note to employees.