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Peloton announced this week that its chief executive officer, John Foley, is stepping down from his post. But unfortunately, it was also revealed that 2,800 employees will have to be laid off as well.
As per CNN Business, the job cut will also affect around 20% of Peloton's corporate positions. The move to eliminate hundreds of employees is reportedly being made as one of the ways to resuscitate Peloton's declining business.
The layoffs were already hinted at by the company's outgoing CEO a few weeks ago. The number of warehouses will also be reduced and will instead expand its delivery agreements with third-party providers. With this plan, the company will be able to save at least $800 million in annual costs.
These changes are all part of the restructuring strategy to save Peloton, which has been beset with various issues in recent months. The company said that the restructuring program was not done in a hurry, but it is the result of extensive planning to tackle primary areas of the business and realign operations to be able to grow.
With the declaration of Foley's removal from the office, the job cuts also started on Tuesday, Feb. 8. The company made it clear that on-camera instructors and content creators will not be affected by the initiatives.
"Peloton is at an important juncture, and we are taking decisive steps. Our focus is on building on the already amazing Peloton Member experience while optimizing our organization to deliver profitable growth," Peloton's co-founder and newly-appointed executive chairman, John Foley, said in a press release. "With today's announcements, we are taking action to ensure Peloton capitalizes on the large, long-term Connected Fitness opportunity."
Foley added that the affected team members are valued by the company as they have also contributed greatly, so they will be offered support in their transition. He also thanked the global team members for their dedication.
Meanwhile, CNBC reported that Barry McCarthy has been appointed to replace John Foley who will remain in the company as executive chair. The new Peloton CEO and president previously worked for Netflix and Spotify as chief financial officer.
