Peloton also loses the CEO of its biggest acquisition ever
LinkedIn posts from departing Peloton employees (and people in the industry willing to help them) are piling up on Tuesday, with one coming from the former CEO of Precor.
Peloton spent $420 million to buy commercial fitness giant Precor in December 2020 as it sought to build production capacity to support its then vision of strong future demand. This is the company’s largest acquisition in its history. The acquisition gave Peloton 625,000 square feet of manufacturing capacity in the United States with in-house tooling and manufacturing, product development and quality assurance in North Carolina and Washington.
But with demand for Peloton bikes and treads waning, former Precor CEO turned senior vice president of commercial at Peloton Rob Barker is leaving with his direct report. William Lynch (who will, however, remain on the board of Peloton).
“Since joining Precor UK as Sales Representative for London and Consumer in January 1995, I have had many wonderful chapters in my life. On Wednesday 9th February I will begin the next one. My next chapter involves great step as I have decided to leave Peloton. After 27 years in various roles at Precor, Amer Sports and Peloton, I am transitioning from full-time corporate executive to small business entrepreneur and fitness industry advisor. I will continue to focus where my passion and the heart lies: the fitness industry and companies that “help people live the life they want” I quickly fell in love with the fitness industry and that love still lives on. strong today. I have worked with so many talented people at Precor, at our customers, at our partners and recently at Peloton. Of course, I will not work with anyone competing with Precor or Peloton,” said D Barker in a long LinkedIn Publish Monday.
Barker’s announcement came a day before Peloton said Barry McCarthy will take over as CEO on Wednesday, replacing founder and CEO John Foley, who will take on the role of executive chairman, and he will cut 2,800 jobs then that it is looking to better align costs with slowing demand for its connected bikes. The moves suggest that Peloton sees a much smaller total addressable market (TAM) for its business, among other things.
Peloton aims to achieve $800 million in savings while reducing capital expenditures by $150 million in 2022.
“As a team with a culture as close and tight-knit as ours, saying goodbye to teammates at all levels is difficult. We aspire to be the best place to work and we know that doesn’t just mean doing Peloton a great place to be at, but that also means making sure Peloton is a place you’re proud to be in. And, while today is one of the toughest in our history, we’re doing everything our best so that you can remain proud of what we have achieved together,” Foley said in a letter to employees.
McCarthy, 69, is known in Wall Street circles as the innovative architect of Spotify’s direct listing in 2018. At Spotify, he served as chief financial officer for several years before retiring in 2019. He is considered having a great passion for numbers, partly reflecting his long experience as Netflix’s CFO. McCarthy has also been a board member of delivery startup Instacart for more than a year.