Peloton CEO to Step Down, 2,800 Workers to be Cut and Several Warehouses Will Be Shut Down in Company’s Transition

The CEO of physical and mental wellness company Peloton is stepping down, and 20 percent of its workforce is getting cut.

Former chief financial officer of Spotify and Netflix Barry McCarthy is set to the place of John Foley as Peloton’s new CEO and president, as Foley transitions into the company’s executive chair, CNN Business reports. The move is the “culmination of a months-long succession plan” that Foley has been working on, the news outlet reports.

And as part of this plan, about 2,800 workers will get cut. This includes about 20 percent of the company’s corporate roles. In addition, the company will be cutting down on the number of warehouses it owns and operates and moving to work with third-party vendors on delivery deals. CNN Business reports the company is looking to these changes result in $800 million in yearly costs.

The company noted that laid-off workers would receive a one-year digital subscription to Peloton as part of their release severance.

“This restructuring program 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,” said the company.

Wall Street Journal was the first to report on the news. McCarthy’s role as CEO and president will take place starting Wednesday.