Exercise equipment company Peloton, a crown jewel during the midst of the pandemic, will lay off 2,800 employees and replace its CEO.
By making a 20% reduction in its workforce, Peloton hopes to boost its profitability after demand for the company’s products and services plummeted in recent months. It also walked back on a $400 million factory it was building in Ohio, allowing it to cut down on delivery and warehousing costs by up to $1 billion.
This vulnerability has led the likes of Amazon, Apple, and Nike to set their sights on acquiring the firm.
The company’s valuation fell from a high of $50 billion to just $8 billion last week, just prior to rumors of an acquisition coming to the surface.
John Foley, cofounder and CEO, will be replaced by Barry McCarthy, who is the former CFO of Spotify and Netflix. As a result, Foley will become executive chair.
“I have always thought there has to be a better CEO for Peloton than me,” said Foley. “Barry is more perfectly suited than anybody I could’ve imagined.”
Foley, who controls 80% of the firm’s voting power, added that the company’s exploration of a sale aims to “create value for Peloton shareholders.”
