Peloton is cutting around 400 jobs worldwide as part of a restructuring effort and its CEO, Barry McCarthy, is stepping down after two years as the company continues to work to turn around its business .
Shares fell about 2% in morning trading to $3.16.
Peloton has been working on a significant rebrand since last year, shifting its identity as a seller of exercise bikes and luxury equipment to health technology for everyone.
The New York company experienced incredible sales growth during the height of the coronavirus pandemic. Its share price multiplied more than fivefold in 2020 amid lockdowns that made its expensive bikes and treadmills popular with customers who pay a monthly fee to participate in interactive workouts.
But sales began to slow in 2021 as vaccines allowed people to leave their homes more freely, including visiting the gym.
The company lost US$1.26 billion in the fiscal year ending in June and another US$350 million in the six months ending in December. Free cash flow, or the money left over after paying the costs of running the business, was negative $470 million in fiscal 2023.
The losses continue. Peloton reported Thursday that in the third quarter it lost $167.3 million, or 45 cents per share. While that’s better than the loss of $275.9 million, or 79 cents per share, reported a year earlier, the performance fell short of the 39 cents per share loss that analysts surveyed by Zacks Investment Research had expected. Revenue totaled $717.7 million, below Wall Street’s estimate of $719.9 million.
It lowered its full-year revenue forecast by $25 million to a range of $2.675 billion to $2.7 billion, a drop from last year’s revenue of $2.8 billion.
See more information: The Great Deal About Being a Peloton Instructor
Peloton Interactive Inc. said Thursday that the job reductions amount to approximately 15% of its global headcount. The restructuring efforts, which are expected to reduce its annual expenses by more than $200 million by the end of fiscal 2025, also include the continued closure of retail showrooms.
The job cuts are just the latest round for the company, which announced in October 2022 that it was cutting around 500 jobs in addition to the nearly 800 layoffs made in August of that year.
McCarthy, who is also stepping down from his roles as president and board member, will remain with Peloton as a strategic advisor through the end of the year.
McCarthy took over as CEO from founder John Foley to right a company that had suffered numerous missteps, from marketing missteps to recalls. During his tenure, he made a big effort to shift Peloton’s focus from expensive hardware to software and a paid app.
In a note sent this morning to the Peloton team, McCarthy said the newly announced job cuts were a time to “deal with the world as it is and not as we want it to be.”
“As difficult as the decision to make additional headcount cuts was, Peloton simply had no other way to align its spending with its revenue,” he wrote.
Peloton said President Karen Boone and Director Chris Bruzzo will serve as interim co-CEOs while a search for its next CEO is conducted. Board member Jay Hoag will become the new president.
This story originally appeared on Time.com read the full story
