The LinkedIn posts of departing Peloton employees (and those people in the industry willing to help them) are piling up on Tuesday, one comes from the former CEO of Precor.
Peloton spent $420 million to buy commercial fitness giant Precor in December 2020 as it sought to build out production capacity to support its then views of strong future demand. It stands as the company’s largest acquisition in its history. The acquisition gave Peloton 625,000 square feet of U.S. manufacturing capacity with in-house tooling and fabrication, product development and quality assurance in North Carolina and Washington.
But with demand for Peloton bikes and treads on the decline, former Precor CEO turn senior vice president commercial at Peloton, Rob Barker, is departing along with his direct report William Lynch (who will stay on Peloton’s board, however).
“Since joining Precor UK as a sales rep for London and Consumer in January 1995, I have enjoyed many wonderful chapters in my life. On Wednesday, Feb 9th, I will be starting my next one. My next chapter involves a big step as I have decided to leave Peloton. After 27 years in various roles at Precor, Amer Sports and Peloton, I am moving from being a full-time executive at one company to a fitness industry small entrepreneur and advisor. I will continue to focus where my passion and heart lies: the fitness industry and those companies that are ‘helping people live the lives they desire.’ I fell in love with the fitness industry quickly and that love is as strong today as ever. 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,” Barker said in a lengthy LinkedIn post on 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 move into the executive chairman role, and it will slash 2,800 jobs as it seeks to better align costs with slowing demand for its connected bikes. The moves suggests Peloton sees a much smaller total addressable market (TAM) for its business, among other things.
Peloton aims to achieve $800 million in cost savings while also slashing 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 any level is hard. We aspire to be the best place to work and we know that doesn’t only mean making Peloton a great place to be at, but it also means ensuring Peloton is a place you are proud to be from. And, while today is one of the more challenging ones in our history, we are doing everything we can to ensure you can remain proud of what we have done together,” Foley said in a letter to employees.
McCarthy, 69, is known on Wall Street circles as the innovative architect of Spotify’s 2018 direct listing. At Spotify, he was CFO for several years before retiring in 2019. He is seen as having a major passion for the numbers, in part reflecting his long-time serving as Netflix CFO. McCarthy has also been a board member of delivery startup Instacart for over a year.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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Source: https://finance.yahoo.com/news/peloton-is-losing-the-ceo-of-its-biggest-acquisition-ever-175305256.html