American fitness platform Peloton on Thursday announced yet another wave of layoffs and said to downsize its global workforce by 15%, affecting roughly 400 employees. The news coincides with the exit of Barry McCarthy as the President, chief executive officer and a Peloton Board Director.
In its fifth round of layoff since its peak in 2021, the company also plans to curb its retail showroom footprint. Furthermore, the restructuring will help Peloton align its cost structure with the current size of its business. The interactive fitness company expects that the move will help Peloton reduce its annual run-rate expenses by more than $200 million by the end of next fiscal year.
“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 said in a statement.
A report by The Verge highlighted that the latest round of job cuts adds to Peloton’s extensive history of layoffs, which began in 2022 and have significantly downsized its workforce from its peak of 8,600 employees in 2021 to approximately 3,000 globally after the recent reductions.
The same day Peloton announced the departure of its chief Barry McCarthy, who assumed the CEO role from founder John Foley just over two years ago. McCarthy will assume the charge of Peloton’s strategic advisor through the end of the year. The hunt for new CEO is ongoing and in the meantime Peloton Chairperson Karen Boone and the company’s Director Chris Bruzzo will serve as Interim Co-CEOs. Additionally, Jay Hoag, who served as a Director at Peloton, has been named the new Chairperson of the Board.
“Barry joined Peloton during an incredibly challenging time for the business. 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,” said Karen Boone. “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.”
Meanwhile, Peloton’s trajectory illustrates the company’s rollercoaster journey from pandemic success to post-pandemic challenges. Initially thriving as demand for at-home fitness solutions surged during quarantine, Peloton experienced unprecedented growth, only to confront unforeseen shifts in demand following widespread vaccine distribution and post-pandemic demand slump. The company’s failure to anticipate these changes in consumer behavior has contributed to its current state of flux.
