Two Peloton co-founders leave amid massive restructuring

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Sep 12 (Reuters) – Peloton Interactive Inc (PTON.O) co-founders John Foley and Hisao Kushi are stepping down from their management roles, as the struggling exercise bike maker undergoes massive changes to reduce losses and regain investor confidence.

“It’s time for me to start a new professional chapter,” said Foley, who was replaced earlier this year as chief executive under pressure from an activist investor as the company struggled to sustain skyrocketing growth. which propelled its valuation to $52 billion in early 2021.

Karen Boone, elected to the company’s board of directors in 2019, will replace Foley as executive chair. Kushi’s chief legal officer, who crafted the new music licensing agreements, will be replaced by former Uber Technologies Inc (UBER.N) executive Tammy Albarrán.

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Shares of Peloton rose 0.5% after hours trading. They had fallen about 69.1% this year through Friday’s close.

Foley, who founded Peloton in 2012 with four others, was replaced as CEO by Barry McCarthy, a former executive at Spotify Technology SA (SPOT.N) and Netflix Inc (NFLX.O), after the investor activist Blackwells Capital called for his removal. Read more

“Say what you want about John Foley. He’s the reason I’m here today. And he’s the reason Peloton is here,” McCarthy said at a Goldman Sachs conference on Monday.

Peloton in its most recent quarter posted a net loss of $1.24 billion as demand for its bikes and treadmills fell and subscription numbers stagnated. Both had skyrocketed at the start of the COVID-19 pandemic. Read more

The fitness equipment maker, which has suffered operating losses every year since its inception, is taking a series of measures including job cuts, price hikes and the listing of its products on Amazon.com to help increase its profits. Read more

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Reporting by Nathan Gomes and Kannaki Deka in Bengaluru; Editing by Shinjini Ganguli

Our standards: The Thomson Reuters Trust Principles.

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