Peloton CEO out; 15% workforce reduction
Peloton Interactive is on the hunt for a new leader.
The struggling fitness hardware and technology company said that Barry McCarthy is stepping down as president, CEO and a member of the board. He will become a strategic advisor to Peloton through the end of the year. McCarthy, a former Spotify and Netflix executive, was named CEO of Peloton in early 2022, succeeding founder John Foley.
The Peloton board has started a search process to identify the company’s next chief executive. Karen Boone, current Peloton chairperson, and Chris Bruzzo, a Peloton director, will serve as Interim co-CEOs. Jay Hoag, a Peloton director, has been named the next board chair.
“Barry joined Peloton during an incredibly challenging time for the business,” said Boone. “During his tenure, he laid the foundation for scalable growth by steadily rearchitecting the cost structure of the business to create stability and to reach the important milestone of achieving positive free cash flow. With a strong leadership team in place and the company now on solid footing, the board has decided that now is an appropriate time to search for the next CEO of Peloton."
Separately, Peloton announced a restructuring efforts aimed at reducing costs that includes reducing its global headcount by approximately 15%, or roughly 400 employees. It also will continue to reduce its retail showroom footprint, and reevaluate its global strategy to be more “targeted and efficient.”
“This restructuring will position Peloton for sustained, positive free cash flow, while enabling the company to continue to invest in software, hardware and content innovation, improvements to its member support experience, and optimizations to marketing efforts to scale the business,” the company stated.
Peloton also announced fiscal third-quarter earnings and sales that missed analysts expectations. It reported a net loss $167.3 million, or $0.45 per share, for the quarter ended March 31, compared with a loss of $275.9 million, or $0.79 per share, in the year-ago period.
Sales fell to $718 million from $748.9 million.