The co-founder of fitness brand Peloton will step down from running the company as he plans to cut thousands of jobs.
John Foley, CEO of the firm for 10 years, will be succeeded by Barry McCarthy, former chief financial officer of Spotify. Despite the change, one of Peloton’s biggest investors doubled his orders to sell the company. Amazon, Nike and Apple are rumored to be interested in bidding on the firm.
The company, which combines its equipment with streaming and live exercise classes, had seen sales of its bikes and treadmills soar during the pandemic, but the return to gyms after the lockdown has left the company worth less than a fifth of its maximum value of $50 billion. .
Foley said that McCarthy was the “right leader to lead the company into its next phase of growth.” Foley will become the chief executive of Peloton.
After announcing the leadership change, US-based Peloton also said it will cut some 2,800 jobs worldwide due to a drop in demand for its products. Shares of the company rose as much as 19% on the New York Stock Exchange on Tuesday.
But one of Peloton’s main investors, Blackwells Capital, which owns a nearly 5% stake in the company, said the changes did not address investor concerns and renewed calls from last month for the company to be sold.
Mr. Foley has shown that he is not fit to lead Peloton, either as CEO or CEO, and should not handpick directors, as he appears to have done today,” added Jason Aintabi, chief investment officer at Blackwells.
In a presentation sent by Blackwells to Peloton on Monday, the investment firm said the company had been “horribly mismanaged, with unbridled enthusiasm rather than disciplined leadership.”
The filing attacked Foley’s abilities as a leader, saying he had made “a series of poor decisions related to product, price, demand, safety and capital allocation. Blackwells previously said that Peloton and its customer base were “extremely attractive” to companies like Nike, Apple, Disney and Sony looking to grow their presence in the home, health and wellness sectors.