Two Peloton founders leaving company

NEW YORK – Two founders of Peloton announced their resignations on Monday, part of an executive reshuffle at the maker of connected bikes and fitness equipment that was a pandemic winner but whose stock price has lost more than two-thirds of its value this year.

One of the founders, Mr John Foley, who was also the chair and a former chief executive, is leaving the company immediately.

Mr Hisao Kushi, another founder and the chief legal officer, will depart on Oct 3, according to a company statement.

After riding high during the early part of the pandemic, when people were isolating at home and could not exercise in gyms, Peloton announced a US$1.2 billion (S$1.7 billion) quarterly loss last month, and has lost money for six straight quarters.

Peloton declined to comment.

Mr Barry McCarthy, CEO since February, has worked to turn the company around ‒ he said last month that Peloton would target “value-minded consumers” ‒after a series of challenges threatened its business.

Mr Foley spent a decade as the CEO of Peloton and was named executive chair in February. He will be replaced as Peloton’s chairman of the board by Ms Karen Boone, who was elected to Peloton’s board in 2019.

Mr Kushi has served as the company’s chief legal officer since 2015.

Peloton’s statement on Monday to the Securities and Exchange Commission announcing the changes to its leadership credited Mr Kushi with crafting “the novel music license deals which are the backbone of the member experience”, among other contributions.

Ms Tammy Albarran, who was the chief deputy general counsel at Uber, will replace Mr Kushi as chief legal officer and corporate secretary in October.

Mr Foley said he was proud of what Peloton’s team had built.

“Now it is time for me to start a new professional chapter,” he said in the company’s statement. “I have passion for building companies and creating great teams, and I am excited to do that again in a new space.”

He added that he would continue to be a Peloton member, saying, “I’ll see you on the leaderboard.”

Peloton was a high flyer in the early days of the pandemic, as demand for its products soared during lockdowns. Soon, however, it was plagued by supply-chain and delivery challenges. The company ramped up its production to meet surging demand, only to find itself with a glut of machines as consumers returned to gyms.

Negative television portrayals, as well as a recall of its treadmills after injuries and the death of a child were linked to the products, led to further turbulence for the business.

In February, when Mr McCarthy took over as CEO, the company laid off about 20 per cent of its workforce, or about 2,800 workers.

Since then, Peloton has laid off more workers, announced plans to close stores and said it would outsource production of its bikes and treadmills to a company overseas.

The company said last month that it would sell its bikes on Amazon, in an effort to expand distribution.

In the statement, Mr McCarthy thanked Mr Foley and Mr Kushi for their hard work, and congratulated their replacements, saying: “I’m confident both will leverage their unique experiences to help move the company forward into our next chapter of growth.” NYTIMES