Peloton CEO John Foley Hands Reins to Ex-Spotify Finance Exec Barry McCarthy

Peloton is coming out ahead of both the opening bell and its late-afternoon Tuesday earnings call with a number of bombshells that promises to stem the flow of a weekslong stock slide and perhaps prepare the stationary bike maker for a potential sale. John Foley, a former Barnes & Noble exec and cycling enthusiast who co-founded Peloton in 2013, is relinquishing his CEO job and handing it to former Spotify and Netflix chief financial officer Barry McCarthy. While Foley has served as chairman of the board since 2015, he'll now move into a more general oversight role in the newly-created role of executive chair, the company said in a statement. On top of the changes at the top, Peloton is also cutting 20% of its workforce, which amounts to roughly 2,800 jobs. That news was expected after the New York-based company said it would halt production of a new factory in Ohio as demand for its stationary bikes sank following easing of pandemic restrictions. Peloton's workforce was made up of about 6,500 people as of last summer, almost double the number in 2020, according to annual company filings. Peloton's wild run The announcement emphasized that Peloton's roster of instructors and the "breadth and depth of its content will not be impacted by the initiatives announced today." The company's fortunes have experienced huge swings over the past two years. When the pandemic hit and gyms were closed, orders of its luxury stationary bikes and signups for its interactive instructors soared. But that growth evaporated quickly as the world began opening up again. Ryan Reynolds on How His Peloton Ad Collaboration Came Together in 48 Hours With an average cost of $1,400, plus $250 delivery and $39 monthly memberships for interactive coaching, the market for expensive exercise equipment was bound to hit a wall. And in the past year, Peloton hit that wall hard as other high-end brands began to eat away at the company's limited market of consumers. Then Peloton was the victim—and, briefly, the lucky recipient—of negative brand placement on two high-profile streaming TV dramas. In December, Peloton unexpectedly found itself playing a role in the "heart attack death" of the Mr. Big character on the first episode of the HBO Sex and the City reboot, And Just Like That... Peaks and valleys Peloton appeared to nimbly recover from that shock when it quickly partnered with Ryan Reynolds’ ad agency Maximum Effort in a much-talked about video ad featuring the actor who played Mr. Big, Chris Noth, alongside the character's favorite instructor. The TV and video commercial was produced and distributed in an unprecedented 48 hours. But the resurrection the brand hoped for was even more short-lived. In a matter of days, Noth was accused by several women of sexual misconduct. While he denied the accusations, the Peloton ad was dropped. Then in January, a character on Showtime drama Billions also experienced a heart attack while riding a Peloton bike (the character survived). The death spiral metaphor appeared to take hold over the past few weeks as it continues to brace investors for additional losses. Shareholders and news outlets have floated a potential acquisition by the likes of Amazon, Apple and Nike, though as of this reporting, those remain rumors. According to Kantar, Peloton spent $198 million on major media (excluding social and search) between January and September 2021, compared to $57 million during the same period in 2020. As one close observer of the company told Adweek on background, Peloton's high-flying value in the depth of the pandemic was always skewed and unsustainable. This brand fan likewise believes that what the company's been experiencing the last two months are similarly out of step with reality. Through it all, Peloton still maintains a powerful, loyal membership base of nearly 6 million subscribers. So its race may not be over just yet. How An Engaged Community Keeps Peloton Pedaling Its Way to Success