Peloton Announces Layoffs and a New CEO


It’s the tail-end of 2020 and Peloton is on a tear: The nation’s foremost at-home spinning brand has reported a 172 percent year-over-year growth in total revenue and ended its fourth quarter with a 210 percent jump in digital subscriptions compared to 2019. Just over a year later, people are returning to gyms and studios in droves, the at-home spinning space is a little more crowded, and Peloton’s pedaling its way through a very different landscape. Today, Peloton announced its decisions to replace long-time CEO John Foley and lay off about 20 percent of its corporate employees following a $40 billion dollar market loss since early 2021. This downshift marks a major turning point for the brand that paved the way for at-home fitness—so the question is: What’s next for the once cycling Goliath?

On Wednesday, Barry McCarthy, former chief financial officer of Spotify and Netflix, will become Peloton’s newly-minted CEO and president reports The Wall Street Journal. Foley, meanwhile, will take on the new position of executive chair. Both leadership switch-ups are the “culmination of a months-long succession plan,” according to Foley. Peloton’s board of directors will also be changing. Angel Mendez (former executive at Cisco) and Jonathan Mildenhall (a former chief marketing officer at Airbnb) will be joining the board, while Erik Blachford (longtime Peloton director) will be stepping down.

The company has also decided to pare down its warehouses, make delivery deals with third-party providers, and “wind-down” the development of its first U.S. factory in Ohio, according to a press release. All of these switch-ups are designed to save the company around $800 million.

If you’re wondering what that means for your favorite Peloton fitness instructors, the press release says they won’t be affected by today’s news. So you can still expect to see your favorites serving up spinning, treadmill, and yoga classes on the app. However, the company did halt the production of its bikes and treadmills in January, and only time will tell what changes McCarthy, Mendez, and Mildenhall will introduce to the brand in the coming months.

Overall, the brand’s recent moves indicate that Peloton would like to remain an independent company, according to CNN Business. However, some key players in the conversation like Neil Saunders, retail analysts, consultant, and managing director of GlobalData—which provides “unique data, expert analysis and innovative solutions to companies in the world’s largest industries”—believe that Peloton would be better off selling the business to other major fitness players like Apple, Amazon, or Nike. However, while Peloton remains its own entity, Saunders told CNN that some major changes will need to be made in order to turn the ship, or stationary bike businsess, around. “Peloton has spent vast amounts of money on stores, factories, warehouses and other facilities to service demand that is now unlikely to materialize. The first step of the new CEO, Barry McCarthy, should be to slash costs to right-size the business,” Saunders previously stated.

Peloton will also need to reimagine how to put forth a unique offering in a time when the at-home cycling offerings abound. At the start of 2022, we called that cycling has staying power as more and more folks opt for hybrid fitness models that allow them to sweat in-studio and in their living rooms. More and more on-demand sweat apps—like obé—are now including cycling workouts as part of their manifold offerings, Equinox has brought SoulCycle bikes under their roofs, and at-home bikes are becoming increasingly interactive and community-building. In other words, Peloton is not in Kansas (read: not the only at-home cycling maverick) anymore. As competition heats up, Peloton will have to fight to stay in the peloton itself.

Well+Good reached out to Peloton for comment, but did not hear back. 

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