Peloton names tech exec Barry McCarthy to replace CEO John Foley,

Peloton is overhauling its C-suite, cutting hundreds of other corporate jobs and slashing millions of dollars in annual costs as it hopes to win back investors’ confidence and reset its business for growth coming out of the pandemic.

The announced changes come days after reports circulated that Peloton could soon be a takeover target. Shares surged on hopes of a deal to be struck with a tech giant or athletic apparel behemoth. But news of a management shakeup and strategic overhaul make this path seem much less likely, at least in the near term.

The connected fitness company announced Tuesday it plans to replace CEO John Foley and cut 2,800 jobs, or about 20% of corporate positions.

Barry McCarthy, the former chief financial officer of Spotify and Netflix, will become CEO and president and join Peloton’s board. McCarthy currently serves on the board of delivery start-up Instacart.

Peloton shares were recently down about 3% in premarket trading on Tuesday, having closed Monday up nearly 21%. As of Monday, the stock is down about 31% year to date, giving Peloton a market value of $9.7 billion.

“Since founding Peloton a decade ago, we’ve grown this brand to engage and motivate a loyal community of more than 6.6 million members,” said Foley, in a press release announcing the leadership changes. “I’m incredibly proud to have worked with such talented teammates over the years who have helped me build Peloton into what it is today, and I’m confident that Barry is the right leader to take the company into its next phase of growth.”

Foley pointed to McCarthy’s previous experience managing subscription business models and digital streaming companies.

The news of Foley stepping down, along with other cost-cutting measures, came ahead of the release of Peloton’s fiscal second-quarter results. In January, Peloton reported preliminary quarterly revenue and subscriber figures, but Tuesday’s announcement also included a lower forecast for the year.

Peloton now anticipates fiscal 2022 revenue within a range of $3.7 billion to $3.8 billion, down from prior expectations of $4.4 billion to $4.8 billion.

The company also said it will end the year with about 3 million connected fitness subscribers. Previously, it projected it would have 3.35 million to 3.45 million. These are people who own one of Peloton’s products and also pay a monthly fee to access its on-demand content.

Peloton said it expects to slash roughly $800 million in annual costs and reduce capital expenditures by roughly $150 million this year.

It plans to wind down the development of its Peloton Output Park, the $400 million factory that it was building in Ohio. It said it will reduce its delivery teams and the amount of warehouse space it owns and operates.

“The decisions we have made will make us a leaner and more nimble organization that is better able to execute against our sizable growth opportunity,” said Foley, in a separate…