Peloton’s co-founder and CEO John Foley is stepping down from his role, just days after activist investor Blackwells Capital called for his removal.
Barry McCarthy, the former chief financial officer of Spotify Technology and Netflix, will take over the reigns starting Wednesday, while Foley will serve as the executive chair. As part of the restructuring, the company also plans to lay off 2,800 employees.
“Foley has proven he is not suited to lead Peloton, whether as CEO or Executive Chair, and he should not be hand-picking directors, as he appears to have done (on Tuesday),” Jason Aintabi, Blackwells’ chief investment officer, said.
The company’s chief executive has been accused of mismanaging the company and failing to sustain the company’s impressive growth trajectory during the pandemic. The bike maker has seen its valuation shrink from $52 billion in early 2021 to just $8 billion as its share value has tumbled by nearly 80%.
However, Foley’s decision to step down from his position has not done enough to appease Blackwells. The company has appointed two new directors to the board, Angel Mendez and Jonathan Mildenhall. In addition, Erik Blachford, who has been on the company’s board for the last seven years, plans to step down.
Blackwells has urged the company’s board to sell its business, which has prompted Nike and Amazon to explore a potential buyout deal. However, a potential acquisition deal might be complicated for Peloton because of its two classes of stock, which give insiders the ability to control the company.