Peloton made a series of announcements during its earnings release Feb. 8, as CEO John Foley will step down, it will cut 2,800 global positions — approximately 20% of the company’s corporate positions — and it slashed its revenue outlook for the full year.

                By                    Yaёl Bizouati-Kennedy

The stock was up 21% mid-morning on Feb. 8, following the news.

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Former chief financial officer of Spotify and Netflix Barry McCarthy will replace Foley, according to a press release.

“It is with great pride in what the Peloton team has built, and a recognition for where we need to go, that I will be transitioning from my CEO role and will assume the role of Executive Chair of the Board of Directors. While I will always be Peloton’s most loyal Member and biggest supporter, I couldn’t think of a better CEO for Peloton’s next stage of growth than Barry McCarthy,” Foley said in a letter to shareholders.  

Aintabi said that while the pandemic offered Peloton a tremendous and unexpected opportunity to accelerate consumer adoption of its category-defining products and drive performance of the business and value for shareholders,  “with the stock now trading below the IPO price, and down more than 80% from its high, it is clear that the company, the executives and the Board have squandered this opportunity.”

In a separate announcement, Pelton announced a series of steps it is taking “to position the business for long-term growth while establishing a clear path to consistent profitability and sustainable free cash flow.”

The company said that once these actions are fully implemented, it expects to achieve at least $800 million of annual run-rate cost savings through operating expense efficiencies and significant margin improvement in its Connected Fitness category.

For the three months ended Dec. 31, Peloton reported net loss of $439.4 million versus net income of $63.6 million in the same period last year, according to the letter to shareholders.

In terms of its financial outlook, the company expects approximately $950 million to $1 billion of revenue in Q3 and $3.7 billion to $3.8 billion for the full year, according to the letter.

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“Our forecast extrapolates traffic trends from the first half of the year into the second and incorporates assumed demand impacts from reduced sales and marketing spend and the implementation of delivery and set-up surcharges on January 31st,” it said.

This is down from a prior range of $4.4 billion to $4.8 billion, according to CNBC.