Peloton is going through a major leadership change as CEO Barry McCarthy steps down and the company announces layoffs of 15% of its staff in a cost-cutting effort to save $200 million. McCarthy, a former Spotify and Netflix executive, will become a strategic advisor to the company while Karen Boone and Chris Bruzzo will serve as interim co-CEOs. Jay Hoag has been named Peloton’s new chairperson. The company is also restructuring globally, cutting 400 employees, closing retail showrooms, and making changes to its international sales plan.
The restructuring is aimed at aligning Peloton’s cost structure with the current size of its business to achieve sustained positive free cash flow. The company plans to invest in software, hardware, content innovation, member support, and marketing efforts to scale the business. The restructuring is expected to reduce annual expenses by more than $200 million by the end of the 2025 fiscal year. McCarthy, who took over from founder John Foley in 2022, has been working on restructuring the business and right-sizing the cost structure by implementing layoffs, closing showrooms, and focusing on the app to attract new members.
Boone thanked McCarthy for his contributions to Peloton during a challenging time for the business and praised him for laying the foundation for scalable growth. The board has decided that now is the appropriate time to search for the next CEO of Peloton. In the meantime, Boone and Bruzzo will be leading the company, ensuring no disruptions while the CEO search is underway. Peloton is aiming to maintain its momentum and continue to grow its membership base through these leadership changes and restructuring efforts.
The company’s focus on achieving positive free cash flow and reducing expenses will be crucial in positioning Peloton for long-term success. The strategic changes being implemented, including the leadership transition and layoffs, are part of a broader plan to realign the company’s operations and cost structure. Peloton will continue to invest in innovation and enhancements to its products and services while also optimizing its marketing efforts to drive business growth and improve the member experience.
The board’s decision to seek a new CEO indicates a commitment to finding the right leadership to drive Peloton forward in its next phase of growth. Boone and Bruzzo’s interim leadership will help ensure a smooth transition during the CEO search process. Peloton is focused on maintaining its position as a leader in the fitness industry and will continue to innovate and adapt to changing market conditions to drive long-term success. The company’s restructuring efforts and leadership changes are part of its strategy to achieve sustainable growth and profitability.
