Peloton activist investor Blackwells Capital sent the fitness company’s board of directors a presentation on Monday renewing its previous call for a change in leadership. By Tuesday, CEO and co-founder John Foley announced his resignation.
Foley is stepping down as CEO and will become executive chairman. Barry McCarthy, former CFO at Spotify and Netflix, will become CEO and president and join the board. Blackwells also called for the resignation of CFO Jill Woodworth.
But Foley’s move wasn’t good enough for Blackwells, as Peloton has seen a major drop in demand with less-than-impressive earnings results under his leadership — the company reported a $376 million first-quarter net loss. In a statement on Tuesday, Blackwells CIO Jason Aintabi said Foley “is not suited to lead Peloton whether as CEO or executive chair.”
The company has seen its stock fall 80% from its high, faced patent hurdles and lawsuits, raised its prices, and had a treadmill recall following a child’s death.
Peloton recently said it was developing plans for cost cuts and workforce changes, too.
- On Tuesday, Peloton announced it will slash around 2,800 jobs.
- The company reportedly expects to cut roughly $800 million in annual costs while reducing capital expenditures by roughly $150 million over the year.
- Peloton is also winding down development of its planned $400 million Ohio factory, Peloton Output Park, and reducing overall warehouse space.
Blackwells, which owns a stake under 5%, also reemphasized demands to explore sale options in its presentation.