NEW YORK, Feb 9, 2022 (BSS/AFP) - Slumping home-exercise company Peloton
announced Tuesday a leadership shift and layoff plan as it scales back
expansion plans due to weakening demand in the shifting pandemic.

   Founder John Foley will step down as chief executive but remain as
executive chairman. Under a cost-cutting plan, the company will eliminate
2,800 jobs in an acknowledgement that it expanded too quickly.

   "This has been a humbling time for Peloton, but we remain confident in the
fundamentals of our business, the strength of our platform, and the
significant growth potential for Connected Fitness and our leadership
position within it," Foley said.

   Foley will be replaced by Barry McCarthy, former chief financial officer
at Spotify and Netflix.

   The company, which has seen growth slow with the end of widespread Covid-
19 lockdowns, said it will trim its planned 2022 capital expenditures by
about $150 million.

   Annual costs are expected to fall "at least" $800 million as the company
cuts corporate positions by 20 percent, Peloton said.

   The company has reportedly been looked at as an acquisition target by
Amazon, among other companies.

   Executives Tuesday depicted the overhaul as intended to capitalize on
long-term growth, even if the short-term is bumpier.

   "We don't think the opportunity has changed," Chief Financial Officer Jill
Woodworth said on a conference call with analysts.

  Woodworth said the company had miscalculated growth due to the
unpredictability of the pandemic, which has more recently led to many
consumers returning to gyms.

   But "connected fitness" will remain a growth category in light of the
trend of more employees working from home or in hybrid formats, she said,
adding that Peloton was well positioned as a leader in this segment.

   - Slower growth seen -

   The shakeup came as the company reported a quarterly loss of $439.4
million as revenues grew 6.5 percent to $1.1 billion.

   The company also trimmed its full-year revenue forecast and its estimate
for connected fitness subscriptions.

   Foley, a former Barnes & Noble executive, acknowledged missteps at the
outset of a conference call outlining the changes.

   "We scaled too quickly," Foley said. "We own this. I own this and we are
holding ourselves accountable. That starts today."

   Besides appointing a new CEO, the company named to the board Angel Mendez
and Jonathan Mildenhall, as well as McCarthy.

   The announcements did not allay criticism from Blackwells Capital, which
has called for Foley's ouster and a potential sale of the company.

   "Peloton CEO John Foley naming himself Executive Chairman and hiring a new
CFO does not address any of Peloton investors' concerns. Mr. 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 today," said
Jason Aintabi, chief financial officer of Blackwells.

   Neil Saunders, managing director of GlobalData, said new CEO McCarthy
should first cut costs and then look for a merger partner if a suitable buyer
steps up.

   "Peloton incorrectly assumed that the demand created by the pandemic -- as
people switched away from gyms to home fitness -- would continue to curve
upward," Saunders wrote. "As society has returned to some semblance of
normality, this has proven to be false -- with subscriber numbers coming in
well below forecast."