Peloton CEO Resigns, Triggering 15% Staff Layoffs Amid Financial Pressures

• Barry McCarthy resigns as Peloton CEO, leading to 15% staff layoffs due to financial pressures.
• Karen Boone and Chris Bruzzo are appointed as interim co-CEOs, with Jay Hoag as the new chairperson.
• Peloton reports Q3 revenue decline, amidst ongoing financial struggles, and aims for debt refinancing.

 

EKO HOT BLOG reports that Peloton’s CEO Barry McCarthy is stepping down, leading to layoffs of 15% of staff due to financial constraints.

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He will become a strategic advisor, with Karen Boone and Chris Bruzzo as interim co-CEOs. Jay Hoag will chair the board.

 

The restructuring plan involves cutting 15% of the global workforce, closing showrooms, and adjusting international sales.

This aims to align costs with current business size, saving over $200 million by 2025.

 

McCarthy’s tenure focused on cost restructuring and growth strategies, emphasizing the app for wider access.

He highlighted the necessity of layoffs for sustainable cash flow amid mounting debt.

Peloton aims to refinance its debt, mindful of maturity timings, collaborating with lenders for a balanced strategy.

 

Boone thanked McCarthy for stabilizing Peloton and announced the CEO search.

The interim CEOs expressed commitment to continuity during the transition.

 

Peloton’s fiscal Q3 results fell short of expectations, with a loss per share of 45 cents and revenue of $718 million.

Sales decreased by 4%, marking nine consecutive quarters of revenue decline.

 

Despite efforts like removing free memberships and corporate partnerships, Peloton struggles to regain sales growth since December 2021.

 

McCarthy’s goal of returning to revenue growth and positive cash flow has been delayed.

Peloton achieved positive cash flow early in Q3, but sustainability remains uncertain.

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Reports of delayed vendor payments and declining hardware sales contribute to Peloton’s financial challenges.

Previous layoffs aimed at restructuring have concluded, shifting focus to growth initiatives.