Peloton announced it will lay off 2,800 people from their jobs as CEO John Foley steps down, as part of a corporate restructuring aimed at reversing the fitness company’s tumbling stock price.
Foley will be replaced as CEO by former Netflix and Spotify tech executive Barry McCarthy.
In a statement on Tuesday, the company said the latest changes are a part of a corporate overhaul in part to “right-size” its operations.
The at-home fitness brand also plans wind down development of the Peloton Output Park (POP), a $400 million factory being built in Ohio, as well as reducing the warehouse space it owns and operates.
“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,” said Foley, a co-founder of Peleton who will now serve as its executive chair.
“This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline.”
The company expects to cut some $800 million in annual costs with the changes, as well as reducing capital expenditures by about $150 million in 2022.
According to The Washington Post, Foley’s changing role comes after activist investor Blackwells Capital acquired a stake in Peloton and called for Foley’s removal as CEO, citing his “repeated failures to effectively lead Peloton.”
CNN reported that the company’s shares have plunged 80 percent, from setting a new high in January 2021. CNBC reported that shares were up nearly 20 percent in trading on Tuesday.