NEW YORK — Peloton is undergoing major changes.
The company announced Tuesday it is replacing CEO John Foley and also cutting about 20% of its workforce.
Barry McCarthy will become Peloton’s new CEO and president, effective Wednesday.
McCarthy has served as CFO at Spotify and Netflix.
Foley will now become executive chair at Peloton Interactive.
Foley helped found the fitness company in 2011, when he first pitched the idea of an interactive exercise bike.
The change in leadership comes after the company experienced success during the pandemic.
Company shares surged more than 400% in 2020 amid COVID-19 lockdowns and people were had no other choice than to work out at home. Nearly all of those gains were wiped out in 2021, as people got vaccinated and were let back into gyms.
Activist investor Blackwells Capital asked again for the company to be sold Tuesday despite the change in leadership.
Blackwells sent a presentation to the company on Monday outlining “the mismanagement of the company by John Foley, the poor governance and board composition and the rationale for immediately commencing a sale process.”
2,800 employees will also be let go, including approximately 20% of corporate jobs at the company.
Peloton shares tumbled 7% just seconds after the changes were announced.
Shares rose back up by the opening bell Tuesday.
The company anticipates at least $800 million in annual cost savings once its actions are fully implemented.