Topline
A Wednesday meeting to introduce Peloton staffers to incoming CEO Barry McCarthy was disrupted by angry comments from current and former employees, CNBC reported, after Peloton laid off 2,800 workers in a bid to rescue the company from a precipitous decline in revenue and market value.
Key Facts
McCarthy’s virtual meeting with Peloton staff and former CEO John Foley, who announced he will step down Tuesday after an activist investor accused him of “leadership failures,” was cut short after the chat was deluged with comments like, “I’m selling all my Peloton apparel to pay my bills!!!” CNBC reported, citing unnamed sources.
Commenters also accused meeting organizers of being “awfully tone deaf” and remarked, “The company messed up by allowing people who were fired into this chat,” according to CNBC.
Peloton did not immediately respond to a request for comment.
Key Background
Driven out of gyms by Covid-19, thousands of fitness fans purchased Peloton’s online-integrated exercise bikes and signed up for remote classes, driving the company’s share price to a high of $171.09 in January 2021 and raising the company’s market value to about $50 billion. By early 2022, following a revenue dropoff, product recalls and unflattering portrayals in media, Peloton’s market capitalization had declined to $12.8 billion, leading activist investor group Blackwells Capital to urge Peloton to fire Foley and to consider a sale. Peloton announced Tuesday that Foley will step down and the company will make widespread staffing cuts, offering laid-off employees free 12-month Peloton memberships by way of extra compensation. CNBC published an internal email Tuesday in which McCarthy told remaining staff he hoped the transition would mark a “comeback.” Peloton’s stock rose from $29.75 shortly before the announcements to $38.77 when markets closed Wednesday.
What We Don’t Know Yet
Analysts have suggested companies like Google and Amazon, wishing to move further into wellness products, may consider buying Peloton. However, Peloton dismissed a Wall Street Journal story last week reporting a possible sale to Amazon as “rumors and speculation.”
Surprising Fact
Ex-CEO Foley has not left Peloton, instead transitioning to executive chairman of the board.
Further Reading
“Peloton CEO Out, As 2,800 Employees Are Laid Off, But Offered Free Peloton Memberships” (Forbes)
