Peloton CEO Barry McCarthy is stepping down, the company said on Thursday as it announced a 15 per cent cut to its global workforce due to a post-pandemic slump in demand for its connected fitness equipment.
Shares of the beleaguered New York-based company rose 14 per cent before the bell as it also aims to pare its retail presence, potentially forcing Peloton to again push back its goal of returning to positive cash flow.
A former Netflix and Spotify executive, McCarthy took the helm in 2022 from founder John Foley and has taken several steps to cut costs.
He also led Peloton’s rebranding push to a software-focused company, leaning on its exclusive content to drive subscriber growth to offset lower equipment sales.
The company has so far taken several cost-cut measures such as changing bike prices, offering its products through third-party retailers, focusing on digital subscription plans and cutting jobs in an effort to return to profitability.
Still, demand for its equipment has remained weak as customers cut back spending due to elevated inflation and rising borrowing costs.
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Peloton said on Thursday it expects connected fitness members for the full year to be between 2.96 million and 2.98 million, lower by 30,000 members from prior forecast.
“Peloton has discovered that fitness trends come and go and staying ahead of the curve is incredibly difficult,” Zak Stambor, senior analyst, retail and ecommerce at research firm Insider Intelligence said.
Peloton chairperson Karen Boone and director Chris Bruzzo will serve as interim co-CEOs. The company also named director Jay Hoag as the chairperson of the board.
The board, meanwhile, has started a search process to identify the next CEO.