“/>Image credits: Michael Nagle/Bloomberg/Getty Images
Peloton, an exercise equipment maker and provider of online fitness classes, announced that it is laying off 15% of its workforce (around 400 people) as part of cost-cutting measures. The company also announced that its CEO, chairman and board director, Barry McCarthy, would step down after two years in the role.
McCarthy, who previously served as CFO at Spotify and Netflix, was forced out of retirement in early 2022 when Peloton co-founder and then-CEO John Foley left his position alongside a major cost-cutting effort which resulted in the layoff of 2,800 employees. Foley remained executive chairman, but left the company seven months later along with co-founder and chief legal officer Hisao Kushi.
Peloton says it is in the process of finding a successor to McCarthy, and that current Peloton president Karen Boone and director Chris Bruzzo would serve as interim co-CEOs during the transition.
Peloton went public in 2019 with an opening valuation of $6 billion and saw its fortunes soar when the pandemic hit. As the world turned inward and people looked for ways to stay healthy through home exercise equipment, the company’s bikes and online classes flew off the shelves, causing it ultimately worth a market capitalization of $50 billion in early 2021.
But when the world returned to normal, so did Peloton’s stock, and its market capitalization fell back to $10 billion in January 2022, a year after its peak.
Today, the New York company’s market capitalization is just over $1 billion. Still, its shares rose 13.3% in premarket trading Thursday morning, apparently buoyed by Peloton’s announcement that it would cut costs.
In addition to reducing its workforce by 15%, Peloton said it also intends to continue to reduce its physical footprint in retail showrooms and double down on its international growth with a more go-to-market strategy. “targeted and effective”. . All these measures should help it reduce its annual expenses by more than $200 million by the end of its 2025 fiscal year.
These announcements came just before Peloton reported worse-than-expected revenue and losses in the third quarter of 2024, as well as a 21% drop in paid app subscriptions compared to a year earlier. When the company reported its second-quarter results in February, its shares fell 24% to an all-time low after reporting a continued decline in revenue and a bleak outlook for the coming months.
News Source : techcrunch.com
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