Peloton is hoping to pedal its way to higher values and is starting at the top by replacing co-founder and CEO John Foley with former Spotify CFO Barry McCarthy, who will also have a board seat, the Wall Street Journal reported on Tuesday (Feb. 8).
Foley isn’t exiting the company entirely; instead, he will take on the role of executive chair. Foley has been CEO since the New York company launched in 2012.
Plans are also in the works at the struggling remote bike and treadmill company to overhaul its board, slash overhead, and layoff 2,800 people, 20% of whom are executives. Peloton’s instructors won’t be affected, nor will its content.
Read more: Peloton and the Amazon Effect on Fitness
“I have always thought there has to be a better CEO for Peloton than me,” Foley told the Journal. “Barry is more perfectly suited than anybody I could’ve imagined.”
McCarthy is relocating from California to New York to take the position and told the WSJ that his expertise is in content-driven subscription models. Foley’s strength is in product development and market.
“Together we can make a complete grown-up and build a really remarkable business,” McCarthy said.
See also: Amazon, Apple, Google, Nike — Even UnitedHealthcare — Have Good Reasons to Buy Peloton
Activist investor Blackwells Capital LLC recently requested that Peloton investigate a sale of the company and show Foley the door.
“We are open to exploring any opportunity that could create value for Peloton shareholders,” Foley said.
The rumor mill has kicked up several possible buyers, including Apple, Nike, Amazon and United Healthcare. Peloton is posting its second quarter earnings report on Tuesday (Feb. 8).
Controlling 80% of the shares, Foley and other insider holders of shares would likely have to approve any deal according to a securities filing.
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