Peloton Announces Layoffs, CEO Resignation, and Cost-Cutting Measures Amid Market Challenges

Peloton, the popular exercise equipment maker and online fitness course provider, is making some major changes as it looks to turn around its fortunes amidst a challenging market landscape. The company has announced that it will be laying off 15% of its workforce, amounting to approximately 400 employees, as part of cost-cutting measures. Additionally, Peloton’s CEO, president, and board director, Barry McCarthy, will be stepping down after two years in the role.

McCarthy, who was previously the CFO at Spotify and Netflix, was brought out of retirement in early 2022 to lead Peloton amid a turbulent period that saw the departure of the company’s co-founder and then-CEO, John Foley, as well as a significant number of layoffs. Since then, Peloton has faced struggles as its market valuation has fluctuated, with its market cap currently sitting at just over $1 billion.

To weather these challenges, Peloton has also announced plans to reduce its brick-and-mortar retail footprint and focus on international growth with a more targeted approach. These measures are expected to help the company save more than $200 million in annual expenses by the end of its fiscal year 2025.

Despite these setbacks, Peloton’s shares were up about 13.3% in pre-market trading following the announcement of the cost-cutting measures, indicating some investor optimism. The company continues to face headwinds, however, as it recently reported lower-than-expected revenue and a decline in paid app subscriptions in the third quarter of 2024.

As Peloton works to navigate these challenges and position itself for future success, the search is on for a successor to McCarthy, with interim co-CEOs appointed to lead the company during this transition period. Only time will tell if these changes will be enough to help Peloton regain its footing in the highly competitive fitness industry.