Peloton stock climbs as CEO steps down, company cuts 2,800 jobs amid slowdown

Feb. 8 (UPI) -- Peloton Interactive CEO John Foley is stepping down from the role while the company expects to cut 2,800 global positions, it announced Tuesday.

Foley, who co-founded the company and has been in the chief executive role for its entire life, penned a lengthy memo to his employees explaining the comprehensive restructuring program, one of which will see him transition to a newly-created executive chairman position.

Former Spotify and Netflix executive Barry McCarthy takes over as President and CEO of the exercise equipment and media company.

"As part of this program, we've made the difficult decision to reduce the size of the Peloton team by approximately 2,800 positions globally. We are making changes at every level of the organization, including within our leadership team," wrote Foley.

The job figure represents around 20% of its global workforce.

Foley also shared that the company will not move forward with its Peloton Output Park, which was slated to be built in Ohio. The company will rely on third-party manufacturing rather than develop the new plant.

The New York-based company is making the changes as it re-evaluates its preparedness for a post-COVID-19 world.

"After careful review, we'll be driving strategic initiatives across our global team that will help us focus on areas that are in need of adjustment, including implementing a comprehensive restructuring program," wrote Foley.

The company was valued at almost $50 billion a year ago, but that number is now closer to $8 billion.

In January, Peloton announced it was halting production of its fitness equipment, sending the company's shares tumbling.

Later that month, minority shareholder Blackwells Capital called on the Peloton board to remove Foley for what it called "​​multiple leadership failures."

"Blackwells also believes that the Board must consider selling the Company to a strategic acquiror," reads the letter.

A report in the Wall Street Journal Friday about a possible takeover bid by Amazon caused Peloton stock to climb.

The company's shares were up more than 28% as of noon Tuesday, after news of the restructuring was released.