Peloton CEO Barry McCarthy will resign, the company said Thursday as it announced a 15 percent cut to its global workforce due to a post-pandemic drop in demand for its connected fitness equipment.
Shares of the embattled New York-based company rose 14 percent before the bell as it also looks to reduce its retail presence, which could force Peloton to again delay its goal of returning to positive cash flow.
McCarthy, a former Netflix and Spotify executive, took over in 2022 from founder John Foley and has taken several steps to cut costs.
He also led Peloton’s rebranding into a software-focused company, leaning on its exclusive content to drive subscriber growth and offset lower equipment sales.
So far, the company has taken several cost-cutting measures, such as changing bike prices, offering its products through third-party retailers, focusing on digital subscription plans, and eliminating jobs in an effort to return to profitability. .
Still, demand for its equipment has remained weak as customers cut spending due to high inflation and rising borrowing costs.
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Peloton said Thursday that it expects year-round connected fitness members to be between 2.96 million and 2.98 million, down 30,000 members from the previous forecast.
“Peloton has found that fitness trends come and go and staying ahead of the curve is incredibly difficult,” said Zak Stambor, senior retail and e-commerce analyst at research firm Insider Intelligence.
Peloton President Karen Boone and Director Chris Bruzzo will serve as interim co-CEOs. The company also named director Jay Hoag as chairman of the board.
The board, meanwhile, has begun a search process to identify the next CEO.