Connect with us

Hi, what are you looking for?

Business News

Peloton co-founder steps down after rough ride

FILE – Peloton CEO John Foley celebrates at the Nasdaq MarketSite before the opening bell and his company’s IPO, Sept. 26, 2019 in New York. Activist investor Blackwells Capital is asking Peloton to remove CEO John Foley and consider selling the company just a few days after a media report said the exercise and treadmill company was temporarily halting production of its connected fitness products amid waning consumer demand. (AP Photo/Mark Lennihan, file)

The co-founder of Peloton is stepping down as chief executive after an extended streak of tumult at the exercise and treadmill company, which is also cutting almost 3,000 jobs.

John Foley first pitched the idea of an interactive exercise bike in 2011, hoping to disrupt the industry. He will give up the CEO position and become executive chair at Peloton Interactive Inc.

Barry McCarthy, who served as CFO at Spotify as well as at Netflix, will take over as CEO.

The company’s shares have been on a roller-coaster ride since the pandemic began, surging more than 400% in 2020 amid COVID-19 lockdowns that included gyms. Nearly all of those gains were wiped out last year as the distribution of vaccines sent many people out of there homes and back into gyms.

This week, there were reports that Amazon or Nike might buy the company and those that have pushed for the sale of Peloton continued to do so this week.

Activist investor Blackwells Capital asked again for the company to be sold Tuesday despite the change in leadership.

Blackwells sent a presentation to Peloton yesterday outlining “the mismanagement of the company by John Foley, the poor governance and board composition and the rationale for immediately commencing a sale process.”

In addition to the leadership shakeup, Peloton announced Tuesday that it was cutting 2,800 jobs, including approximately 20% of corporate jobs at the New York City company. The instructors who lead interactive classes for Peloton will not be included in cuts, nor will the content that the company relies on to lure users.

Peloton said its winding down the development of its Peloton Output Park in Ohio. It will also reduce its owned and operated warehousing and delivery locations and will instead ramp up its third-party relationships.

Peloton is looking to reduce its planned capital expenditures for this year by about $150 million. The restructuring program is expected to result in approximately $130 million in cash charges related to severance and other exit and restructuring activities and $80 million in non-cash charges. The majority of the charges will be recorded in fiscal 2022.

In a conference call with analysts, Foley acknowledged that mistakes had been made and that the company invested too quickly.

“We own it. I own it and we are holding ourselves accountable,” Foley said. “That starts today.”

The company anticipates at least $800 million in annual cost savings once its actions are fully implemented.

Wall Street took the shakeup Tuesday as a pivotal moment for Peloton.

Advertisement. Scroll to continue reading.

“We believe Foley leaving makes it more likely that Peloton ultimately sells the company and the board clearly has major decisions to make in the days/weeks/months ahead,” wrote Wedbush analysts Daniel Ives and John Katsingris.

Copyright 2021 Associated Press. All rights reserved.

Source: https://apnews.com/article/peleton-cofounder-john-foley-resigns-157ba44b0e2ff03a5b8e09210db31cb5

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Business News

PORTO-NOVO, Benin (AP) — For many people in Benin, the forests empowered them before they were born, or in the first months of their...

Business News

EUGENE, Ore. (AP) — Psilocybin tea, wind chimes and a tie-dye mattress await those coming to an office suite in Eugene to trip on...

Business News

The U.S. government is taking aim at what has been an indomitable empire: Google’s ubiquitous search engine that has become the internet’s main gateway....

Business News

ANKARA, Turkey (AP) — A major rescue operation is underway in Turkey’s Taurus Mountains to bring out an American researcher who fell seriously ill...

Copyright © 2023 Newsworthy News | Global | Political | Local | All News | Website By: Top Search SEO