Sacked Peloton staff crash all-hands virtual staff meeting

The new head of Peloton held a virtual all-hands meeting after the troubled home exercise company announced it was sacking 2800 staff. It did not go well.

Sacked workers of troubled home exercise company Peloton have reportedly crashed the new chief executive’s first all-hands virtual meeting.

Peloton, which announced on Tuesday it was slashing 2800 jobs and scaling back expansion plans due to weakening demand, had called the staff meeting on Wednesday to introduce its new CEO Barry McCarthy.

But CNBC reports a conversation between Mr McCarthy and outgoing CEO John Foley ended early after current and former employees started using the meeting’s chat function to fire off angry comments about the job cuts and accusations of mismanagement.

“I’m selling all my Peloton apparel to pay my bills!!!” wrote one person, according to messages obtained by the outlet.

“This is awfully tone deaf,” another said.

A third wrote, “The company messed up by allowing people who were fired into this chat. Too late to mod (moderate) this.”

New Peloton chief executive Barry McCarthy. Picture: Drew Angerer/Getty/AFP

Under the plan announced Tuesday, Mr Foley, the company’s founder, will step down as CEO but remain as executive chairman.

Mr McCarthy, former chief financial officer at Spotify and Netflix, told employees in an email on Tuesday that the elimination of around 20 per cent of the company’s corporate workforce was a “bitter pill”.

“(But) either revenue had to grow faster or spending had to shrink,” Mr McCarthy wrote, according to CNBC.

Peloton’s fitness instructors will not be affected by the job cuts.

The company said annual costs were expected to fall “at least” $US800 million ($1.1 billion).

Sacked employees have been offered cash severance payments, career assistance and a 12-month Peloton membership.

Peloton has admitted it expanded too quickly.

Executives on Tuesday depicted the overhaul as intended to capitalise on long-term growth, even if the short-term is bumpier.

Peloton CFO Jill Woodworth said the company had miscalculated growth due to the unpredictability of the pandemic, which has more recently led to many consumers returning to gyms.

The company also trimmed its full-year revenue forecast and its estimate for connected fitness subscriptions.

“We scaled too quickly,” Mr Foley said. “We own this. I own this and we are holding ourselves accountable. That starts today.”

The announcements did not allay criticism from Blackwells Capital, which has called for Mr Foley’s ouster and a potential sale of the company.

Neil Saunders, managing director of GlobalData, said new Mr McCarthy should first cut costs and then look for a merger partner if a suitable buyer steps up.

The takeover talk has sent Peloton shares skyrocketing by more than 50 per cent to $US37.46, from $US24.60 prior to Tuesday’s announcement.

— with AFP