Breaking the cycle: Peloton spins downward

It’s just not working out. Peloton on Tuesday revealed plans to restructure its leadership in a bid to win back customers, triggered by a massive drop in demand for its once-trendy exercise equipment.

The company that makes stationary bikes and treadmills is cutting 2,800 jobs.

Starting Wednesday, co-founder John Foley, who has led the company since it was established 10 years ago, will no longer be CEO and instead serve as the board’s executive chairman — and Barry McCarthy, the former chief financial officer of Spotify and Netflix, will step into the leadership role.

In a conference call, Foley admitted the company expanded too quickly.

“We own it. I own it, and we are holding ourselves accountable,” he said. “That starts today.”

The New York-based company also said it would slash an estimated 20% of its corporate workforce, in addition to reducing the number of warehouses it owns and operates.

In an email to the laid-off employees Tuesday, Foley (photo) offered a year of complimentary fitness classes as part of their severance package, which also includes severance payments and extended health care coverage.

Instructors have not been affected in the mass layoffs.

Peloton, which offers interactive exercise classes that can be done at home, became a workout craze during the COVID-19 pandemic, when gyms were closed.

But in recent months, the company has been spinning its wheels, with business down and its stock price tanking.

Peloton was also hurt by one of its products. In May, the company recalled about 125,000 Tread+ treadmills, after initially denying they were dangerous. One of the treadmills was linked to the death of a child, while others were connected to 29 injuries.

Since Monday, however, shares have climbed nearly 20% following reports that Amazon and Nike were exploring bids for the company. Apple has also been rumored to be a potential buyer.