Barry McCarthy is stepping down as Peloton’s CEO, president and Board director. Peloton Board members Karen Boone and Chris Bruzzo will serve as interim Co-CEOs; Jay Hoag will become the chairperson of Peloton’s Board of Directors.

Peloton Interactive, Inc. announced that Barry McCarthy is stepping down as president, CEO and Peloton Board director and take on a strategic advisory role through the end of the year. The Board is conducting a comprehensive search to identify McCarthy’s replacement.

“On behalf of the Board, I want to thank Barry for his contributions to Peloton. Barry joined Peloton during an incredibly challenging time for the business. During his tenure, he laid the foundation for scalable growth by steadily rearchitecting the cost structure of the business to create stability and to reach the important milestone of achieving positive free cash flow,” said Boone. “With a strong leadership team in place and the Company now on solid footing, the Board has decided that now is an appropriate time to search for the next CEO of Peloton.”

Bruzzo added “Peloton provides unparalleled fitness experiences for our Members, which they love as evidenced by our strong NPS scores. The team continues to innovate across our hardware, software and content portfolios, while simultaneously driving transformation in our marketing organization to increase engagement with new, targeted audiences. There is a huge opportunity in front of us to significantly expand the number of people we serve.”

“I have known and worked closely with Barry for nearly two decades and I am grateful for his leadership of Peloton during these last two years, including recruiting a very talented and diverse group of leaders. The Board and I are deeply appreciative that Barry has agreed to serve as a strategic advisor to the company,” added Hoag.

The company’s shift at the top comes as Peloton reported it will undergo a comprehensive restructuring plan to align its cost structure with the size of its business. 

The overhaul is expected to position Peloton to “sustained, positive free cash flow and enable continued investment in software, hardware and content innovation, improvements to its member support experience, and optimizations to market efforts to scale the business.”

Once fully implemented, the company expects the restructuring plan to reduce annual run-rate expenses by over $200 million by the end of its 2025 fiscal year.

Specifically, Peloton expects to:

  • Reduce global headcount by approximately 15 percent, which impacts roughly 400 Peloton employees.
  • Continue reducing the number of retail showrooms.
  • Rework its international go-to-market approach to be more targeted and efficient, leveraging global strategies and capabilities with localized execution so that the business can optimize and consolidate resources.

Image courtesy Peloton