Exercise equipment brand Peloton, which grew in popularity over pandemic lockdowns, has revealed it is replacing its chief executive and will lay off 2,800 employees.

Peloton store

Co-founder John Foley, who has led the company since its founding 10 years ago, will step down as chief executive and will now be the company’s executive chair. He will be replaced by Barry McCarthy, former chief financial officer of Spotify and Netflix.

The company also stated that it would cut 2,800 jobs, amounting to about 20% of the company’s corporate positions, as it battles a slowdown in demand following the reopening of gyms. 

Those who have lost their jobs will receive a free Peloton membership for a year which will allow them to access online workouts tailored to the Peloton bike. They will also receive a redundancy package.

Rumours of a possible sale

The move to make changes within the company comes as Peloton lowered its revenue, subscription and profitability forecasts for the year. It now estimates revenue will stand at between $3.7bn (£2.73bn) to $3.8bn (£2.8bn), down from an earlier forecast of around $4.4bn (£3.25bn) to $4.8bn (£3.54bn).

Shares in Peloton rose by around 19% following the news of the planned changes.

Peloton is currently valued at around $9bn (£6.64bn), down from the pandemic peak of $50bn (£36.64bn) last January, with one of its top investors Blackwells Capital now calling for the company to be sold.

Despite Peloton’s change of fortunes, Amazon, Nike and Apple have recently been rumoured to be among those interested in placing a takeover bid for the exercise brand. 

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