LONDON (ShareCast) - (Sharecast News) - The co-founder of embattled fitness firm Peloton Interactive is stepping down as chief executive, it was confirmed on Tuesday.
John Foley, who has led the US fitness specialist since it was founded a decade ago, will be replaced by Barry McCarthy, the former chief financial officer of Spotify and Netflix. Foley will become executive chair.

As well as the board shake-up, which includes the appointment of two new directors - Angel Mendez and Jonathan Mildenhall - Peloton also announced that around 2,800 global jobs will be cut it looks to achieve around $800m in annual cost savings.

The redundancies will reduce corporate roles by around 20% and will "streamline reporting structures and create clearer lines of accountability", Peloton said. Its roster of instructors and content will not be affected.

The company also intends to reduce 2022 capital expenditure by $150m and wind down the development of its Peloton Output Park factory in Ohio.

Foley said: "Peloton is at an important junction and we are taking decisive steps.

"This restructuring programme is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline."

Tuesday's update - which comes ahead of second-quarter numbers - follows an extended collapse in Peloton's share price alongside increasingly vocal criticism from US activist investor Blackwells Capital, which has a stake of nearly 5%. Blackwells has accused the firm of mismanagement and overseeing a sharp drop in the share price since the 2019 initial public offering. It has urged Foley to step down and asked the company to consider a sale.

Demand for Peloton's bikes and exercise equipment surged during the pandemic but as restrictions eased and people returned to the gym, the stock has tumbled. The shares have lost 15% so far this year and 79% over the last 12 months. The share price jumped 21% on Monday on takeover rumours, but was down 3% in pre-market trading by 1300 GMT on Tuesday.

The restructuring is expected to result in a cash charge of around $130m, mainly related to severance pay, and non-cash charges of around $80m, the majority of which will be recorded in the 2022 fiscal year.

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