Shares of Peloton Interactive Inc.
PTON,
+11.83%
slumped 8.0% in premarket trading Tuesday, after the at-home fitness company confirmed that co-Founder John Foley will step down as chief executive and that it will implement a cost-cutting plan that will lead to 2,800 job cuts. The Wall Street Journal had previously reported the CEO change and cost-cutting plan. The company named Barry McCarthy, who was formerly chief financial officer of Spotify Technology SA
SPOT,
-1.95%,
as CEO, effective Feb. 9. Foley will become executive chairman of the board. Peloton President William Lynch “transitions” to a nonexecutive director. The cost-cutting plan is expected to save at least $800 million a year through operating expense efficiencies in its Connected Fitness category. The 2,800 jobs it is cutting represents 32.3% of its workforce as of June 30, 2021. The company expects to record $130 million in cash charges related to severance and other restructuring activities. The company’s announcements come after the stock soared 20.9% on Monday after reports that it was in talks to be acquired, following a big selloff in its stock price. The stock had plunged 42.0% over the past three months through Monday while the S&P 500
SPX,
-0.13%
has slipped 4.6%.
