Peloton announced Tuesday a major leadership shakeup and a plan to cut costs that includes laying off some 2,800 employees.
The announcement comes as the pandemic wanes in the U.S. and gyms are reopening, lessening demand for the company's at-home workout equipment and famous stationary bike.
The New York-based company said co-founder John Foley will be stepping down as CEO but will stay with the company as executive chair of the board. Barry McCarthy, a former senior leader at Spotify and Netflix, has been appointed the new CEO and president of Peloton.
MORE: How sky-high inflation is evaporating Americans' savings, imposing 'cruelest tax' on the poor"Since founding Peloton a decade ago, we've grown this brand to engage and motivate a loyal community of more than 6.6 million members. I'm incredibly proud to have worked with such talented teammates over the years who have helped me build Peloton into what it is today, and I'm confident that Barry is the right leader to take the company into its next phase of growth," Foley said in a statement Tuesday.
McCarthy added, "As a passionate Peloton member, I have experienced firsthand this fantastic company's mission and believe there is enormous potential for the platform."
"I'm honored to join Peloton at such an important moment in the company's history and look forward to working closely with John, the Board and Peloton's team members at all levels of the organization to execute against Peloton's strategy and take the business to the next level," he said in a statement.
MORE: Why the global chip shortage threatens the economy, national security and Americans' 'status quo'The company simultaneously announced a "workforce reduction" that will result in the cutting of some 2,800 jobs globally, or approximately 20% of its corporate staff. Peloton said that its "roster of instructors and breadth and depth of its content" will not be impacted by Tuesday's announcements.
"These decisions, particularly those related to our impacted Peloton team members, were not taken lightly," Foley said. "We greatly value the contributions of our talented colleagues and are committed to supporting impacted team members in their transitions."
Once revered as a hot stock early on in the pandemic, Peloton shares have slumped some 75% since its highs seen a little over a year ago. The company has endured a tumultuous start to 2022 marked by investor turmoil, and it reported a net loss of some $439 million in its most recent quarterly report.