The co-founder of Peloton is stepping down as chief executive after an extended streak of tumult at the interactive exercise bike and treadmill company.
John Foley first pitched the idea for Peloton in 2011, hoping to disrupt the industry. He will give up the CEO position and become executive chair at Peloton Interactive Inc. The company is also cutting almost 3,000 jobs.
Barry McCarthy, who served as CFO at Spotify as well as at Netflix, will take over as CEO, the company said Tuesday.
Shares surged more than 30% in mid-day trading on Tuesday on the moves, despite Peloton reducing its annual outlook for sales and subscriptions and reporting a big loss for its fiscal second quarter.
Peloton has been on a wild ride for the past two years during the pandemic. Company shares surged 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.
Peloton’s initial success also created competition, with companies peeling away customers by selling cheaper bicycles and exercise equipment. High-end gyms also jumped into the game, offering virtual classes that once were Peloton’s biggest draws. All the while, Peloton misjudged the slowing demand and kept churning out its products.
