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Peloton cuts 2,800 jobs, names new CEO

After falling off a pandemic-driven boom, the fitness equipment company is going through a major shakeup.

peloton-bike-plus
The Peloton Bike Plus is physically similar to the original, but has a bigger screen and automatic resistance adjustments.
Rick Broida/CNET

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 its plan for a factory in the US, 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, including Amazon. A 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.

Peloton declined to comment beyond the note to employees.