Peloton yesterday announced CEO Barry McCarthy was stepping down and the company was laying off 15% of its staff—around 400 people. Two board members will serve as interim co-CEOs as the fitness company struggles to rebrand and works to refinance more than $1B in debt.

From 2020 to 2021, Peloton’s market capitalization grew from $6B to $50B, driven by a lockdown-fueled spike in demand for at-home exercise equipment, including Peloton’s high-end stationary bicycles and treadmills. Since December 2020, however, the company has failed to turn a profit. The end of lockdown has seen a dive in demand while safety concerns forced Peloton to recall more than 2 million devices. Since McCarthy was hired in 2022, he worked to pivot the company from reliance on hardware to software, including prioritizing a fee-based fitness app.

Yesterday’s announcement came as Peloton revealed revenue dropped 4% since last year. Shares dropped 12% on yesterday’s news.

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