Peloton’s Founder Stepping Down as CEO Following Company Struggles



The Pandemic Boom Has Fizzled

Peloton (PTON) exploded in popularity and name recognition early on in the pandemic. With millions of people stuck at home and unable to partake in traditional exercise, the company’s bikes and virtual classes offered a combination of fitness and community. Peloton’s valuation rose significantly, but its fortunes have changed. Up until recently the stock was trading below its 2019 IPO price of $29 per share.

Analysts note the company has seen subscriber growth stagnate, and recently production was halted due to lagging demand for Peloton bikes and treadmills. Plainly stated, gyms are filling up again as pandemic-related restrictions ease, and that means fewer people buying Peloton products. The stock popped on Monday amid rumors of a possible buyout, and now the company is taking proactive steps.

Co-Founder Stepping Down, New CEO Moves In

On Tuesday, Peloton confirmed reports that co-founder and outgoing CEO John Foley would be stepping down as part of a larger restructuring. Former Spotify (SPOT) and Netflix (NFLX) CFO Barry McCarthy will become Peloton’s new chief executive. The New York-based company also plans to eliminate 2,800 jobs in a cost-cutting measure, as it reports a most-recent quarterly loss of $439 million and downcast revenue guidance.

Both Foley and McCarthy have expressed confidence in the company’s future from this point on. They say Peloton is better suited to executive leadership that understands how to maximize the content-driven subscription model, as opposed to marketing and product development. Two new directors are being added with backgrounds in supply-chain management and branding.

Where Peloton Goes From Here

Peloton’s share price soared on Monday as word hit the market that Nike (NKE) and Amazon (AMZN) could be interested in acquiring the company. While some investors have called for the company to sell itself, analysts say the decision to name a new CEO could indicate plans to remain as a standalone company. From a different angle, Peloton may not be interested in selling right now given the stock’s steep decline.

Peloton says reducing costs is the focus for 2022, with goals to cut annual spending by $800 million and capital expenditures by $150 million. The $400 million development of Peloton Output Park, an Ohio factory, is also being wound down. Executives say the company grew too fast without realizing COVID-19-era lockdowns were not the “new normal.” Investors had been looking for clarity as Peloton had been forecasting cost-cutting moves, but the restructuring’s long-term impact remains to be seen.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22020901


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.


TLS 1.2 Encrypted
Equal Housing Lender