Fitness company Peloton rocketed to fame during the pandemic. With gyms being forced to close, thousands of people across the world bought Peloton bikes and workout membership so they could continue to exercise at home.
In June 2020, its membership hit 3.1 million, twice as many as 2019; its revenue also grew 172% in 2020.
But Peloton had issues keeping up with the surge in demand and is now struggling with a slow down in demand as gyms re-open and people return to their offices.
There had been rumors about the company being bought by Nike, Apple or Amazon, but none of that materialized into anything concrete. Now founder John Foley has stepped down as CEO, but will remain as executive chair. Peloton’s president William Lynch has also changed role and will become a non-executive director.
Foley is going to be replaced as CEO by former Spotify CFO Barry McCarthy.
Talking about McCarthy’s appointment, Foley wrote: “Barry is an incredible leader who has held senior executive roles at Spotify and Netflix and is a longtime advisor and board member at public and private technology companies.
“This appointment is the culmination of a months-long succession plan that I’ve been working on with our Board of Directors, and we are thrilled to have found in Barry the perfect leader for the next chapter of Peloton. I look forward to working with him and invite you to welcome him with open arms.”
While announcing his role change, Foley also noted that “we’ve made the difficult decision to reduce the size of the Peloton team by approximately 2,800 positions globally.” The job cuts are happening across all levels of the organization and affect around 20% of its corporate staff.
Peloton hired McKinsey to consult on its layoffs, according to TechCrunch.
Inside Peloton’s mass firing
“As a team with a culture as close and tight-knit as ours, saying goodbye to teammates at any level is hard,” Foley continued.
“While today is one of the more challenging ones in our history, we are doing everything we can to ensure you can remain proud of what we have done together.
“The choices we’ve made today, some of which were very difficult, will help us get closer to creating a more focused, stronger Peloton for tomorrow.”
Interestingly, Peloton has made commitments to support those who are getting laid off – this makes its approach the polar opposite of the mass firing by Better at the end of December.
For instance, Peloton will provide its US and Canada employees with cash compensation, equity, as well as a continuation of their Peloton membership and their health insurance.
The company will also support its staff with getting new jobs. Foley explained: “We’re offering career services through Randstad’s RiseSmart, a leading third-party vendor. This includes transition services, dedicated 1:1 sessions, a certified resume writer, job leads and Career Tools.
“Through this vendor, we’ll also be providing the option to voluntarily opt-in to a talent directory, which will showcase our incredible talent to leading employers.”
What does the future hold for Peloton? How can it regroup and ensure it can be the best employer for those remaining staff?
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