Peloton nasdaq Pton Hit by Double Blow of Ceo Resignation and Layoffs Stock at Historic Low

Peloton (NASDAQ: PTON) Hit by Double Blow of CEO Resignation and Layoffs, Stock at Historic Low

Peloton Interactive (NASDAQ: PTON) stock hit an all-time low Thursday after the company announced new cost-cutting measures, including layoffs, alongside CEO Barry McCarthy’s resignation.

Peloton (PTON) has revealed plans for comprehensive restructuring efforts to align the company’s cost structure with its current business size, to achieve sustained positive free cash flow.

The restructuring measures include about 15% of its workforce reduction, amounting to 400 positions. In addition, Peloton will continue to decrease its retail showroom footprint and overhaul its international go-to-market approach to enhance targeting and efficiency.

The announcement comes in the wake of Peloton’s fiscal third-quarter results for 2024, which fell short of expectations. The company reported a loss of 45 cents per share, with revenue declining by 4.2% year-over-year to $717.7 million, both figures missing estimates compiled by Visible Alpha.

Connected fitness revenue saw a 13.6% decline to $279.9 million, while subscription revenue increased 3.1% to $437.8 million. Membership base decreased by 1.5% to 6.6 million.

Moreover, Peloton revealed leadership changes, with Barry McCarthy stepping down as President, CEO, and a Peloton Board Director. McCarthy will transition to a strategic advisor role until the end of the year. The Board has initiated a search for Peloton’s next CEO, with Karen Boone and Chris Bruzzo appointed Interim Co-CEOs. Additionally, Jay Hoag has been named the new Chairperson of the Board.

McCarthy’s tenure began in February 2022, amid challenges stemming from a decline in demand following the peak of the COVID-19 pandemic. During his leadership, Peloton underwent significant restructuring efforts, including workforce reductions and cost-cutting measures.

Peloton Interactive (NASDAQ: PTON) Stock Reaction

PTON stock fell 2.80% to close at $3.13 on Thursday. Its value has risen by 3.30% this week. Trading activity has witnessed 62,218,964 (62.21 million) shares changing hands, well above the average daily volume of 12.28 million.