The co-founder of Peloton is stepping down as chief executive after an extended streak of tumult at the interactive exercise bike and treadmill company, which will also cut almost 3,000 jobs.
A Peloton user works out in Pittsburgh. The co-founder of Peloton is stepping down as chief executive, Tuesday, Feb. 8, 2022, after an extended streak of tumult at the exercise and treadmill company which will also cut almost 3,000 jobs.
Peloton has been on a wild ride for the past two years during the pandemic. Company shares surged more than 400% in 2020 amid COVID-19 lockdowns that included gyms. Nearly all of those gains were wiped out last year as the distribution of vaccines sent many people out of there homes and back into gyms.
Blackwells sent a presentation to Peloton on Monday outlining “the mismanagement of the company by John Foley, the poor governance and board composition and the rationale for immediately commencing a sale process.” Peloton is looking to reduce its planned capital expenditures for this year by about $150 million. The restructuring program is expected to result in approximately $130 million in cash charges related to severance and other exit and restructuring activities and $80 million in non-cash charges. The majority of the charges will be recorded in fiscal 2022.
In a conference call with analysts, Foley acknowledged that mistakes had been made and that the company invested too quickly.The company anticipates at least $800 million in annual cost savings once its actions are fully implemented.“We believe Foley leaving makes it more likely that Peloton ultimately sells the company and the board clearly has major decisions to make in the days/weeks/months ahead,” wrote Wedbush analysts Daniel Ives and John Katsingris.
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