Peloton Interactive Inc (NASDAQ:PTON) boss Barry McCarthy will step down as CEO amid a large-scale restructuring plan that also will see 15%, or around 400, team members lose their jobs.
The Covid-era exercise bike fitness favourite hopes to save $200 million by the end of fiscal 2025 through the restructuring plan that will also see its showroom footprint reduced.
Peloton is a shadow of what it was during the height of its popularity during pandemic-era lockdowns.
Having peaked at $163 per share in December 2020, the stock has since collapsed 98% to barely $3.
“The objective of the cost reductions is to align our cost structure with the current size of our business and position Peloton to generate sustained and meaningful positive free cash flow, which is a top priority for us,” read the shareholder letter in today’s third-quarter earnings release.
Debt concerns are also mounting, with management announcing refinancing negotiations with lenders JPMorgan and Goldman Sachs.
“We are mindful of the timing of our debt maturities, which consist of convertible notes and a term loan, and we know this is also on the minds of our shareholders,” said the group.
On the bright side, Peloton achieved positive free cash flow of $8.6 million in the third quarter for the first time in over three years.
Peloton board members Karen Boone and Chris Bruzzo will serve as interim co-CEOs.