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Peloton Interactive, Inc. announced significant leadership changes on Thursday, May 2. The exercise equipment and media company headquartered in New York revealed that its chief executive officer, Barry McCarthy, is also stepping down.
In addition to the CEO’s departure, Peloton is trimming its workforce, and 15% of it is about to lose its jobs. The company will also start restructuring to ease its financial troubles by refinancing its debt.
CEO’s Exit and Failed Recovery
As per The New York Times, McCarthy was appointed CEO in February 2022. When he took over, he was expected to help revive the company after experiencing a slump due to the COVID-19 pandemic that hit worldwide. However, despite his efforts, Peleton continues to struggle and fails to become profitable.
In its quarterly earnings report posted on Thursday, Peloton revealed disappointing results, with revenue dipping by four percent from the previous year. Moreover, it has not earned a profit since December 2020, so it is now planning to refinance its over $1 billion debt as well.
With these problems still unresolved, Peloton said McCarthy is stepping down. It will also terminate more employees as it struggles to keep up and perform well in the fitness market.
“We made some very tough decisions, and while we firmly believe these actions are the right thing to do for the business, cuts like this are painful,” Peloton’s chief financial officer, Liz Coddington, said about the layoffs.
Appointed New Leaders
Peloton said McCarthy is also vacating his president and board director seats. The company appointed two board members—Chriss Bruzzo and Karen Boone—to take over the interim CEO role. Once McCarthy leaves, they will serve as co-chief executives. Jay Hoag will also become the chairman of the board.
"On behalf of the Board, I want to thank Barry for his contributions to Peloton. 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," Boone said in a press release. "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."
Photo by: Andrew Valdivia/Unsplash
