The New York-based company will also cut about 2,800 jobs, affecting 20% ​​of its corporate positions, to help deal with falling demand and rising losses. Cuts will not affect the list or content of Peloton instructors.

Just over two weeks ago, activist investor Blackwells Capital LLC asked Peloton to fire Mr. Foley and explore a sale of the company, which the Journal said is attracting potential suitors including Amazon. com Inc.

Blackwells reiterated his call on Tuesday, saying Mr Foley should leave the company entirely rather than become executive chairman. The company also released a 65-page presentation in which it believed a sale could value Peloton above $65 per share. Shares of Peloton closed Monday at $29.75.

“We are open to exploring any opportunity that could create value for Peloton shareholders,” Mr. Foley said in an interview ahead of Blackwells Tuesday’s publication. Mr Foley, a former Barnes & Noble Inc executive who co-founded Peloton 10 years ago last month, declined to comment further.

The appointment of a new CEO could signal that Peloton sees an independent future for itself, or at least doesn’t want to sell at the current depressed share price. Any deal would likely require Mr. Foley’s backing, as he and other insiders hold shares that give them control of more than 80% of Peloton’s voting rights as of Sept. 30, according to a securities filing.

Once a pandemic darling as homebound customers ordered its exercise equipment and streamed its virtual classes and its valuation skyrocketed, Peloton’s fortunes have recently slumped, with its stock until recently trading below from its September 2019 IPO price of $29 per share as lockdowns ease and gyms begin to fill up again.

Shares of the company rose 10% on Tuesday morning after confirming an earlier Journal report on leadership and other changes and said it posted a net loss of $439 million in the second quarter. Peloton also lowered its full-year revenue forecast to a range of $3.7 billion to $3.8 billion, down from its previous range of $4.4 billion to $4.5 billion. of dollars.

The company’s value fell from a high of around $50 billion about a year ago to around $8 billion last week, before its shares rose 21% on Monday following the announcement of potential suitors.

Peloton said it was planning cost cuts and reviewing its workforce size and production levels. Investors were awaiting details of his plans.

MM. Foley and McCarthy said the company had long been planning to hire a new CEO and that Mr. McCarthy had come on the scene in recent weeks.

“I always thought there had to be a better CEO for Peloton than me,” said Mr Foley, 51. “Barry is more perfectly suited than anyone I could have imagined.”

Mr. McCarthy, who is in his late 60s and plans to move from California to New York, said his strength was a deep understanding of content-driven subscription models, while Mr. Foley is in development and product marketing.

“Together we can grow into a complete adult and build a truly remarkable business,” Mr. McCarthy said. He was a consultant for investor Peloton Technology Crossover Ventures, sits on the boards of Instacart Inc. and Spotify, and served as the music streaming service’s chief financial officer until early 2020.

Peloton is making other personnel changes: William Lynch, the company’s president, will leave his executive position but will remain on the board; Erik Blachford, director since 2015, will leave the board; and two new administrators will be added.

The new directors are Angel Mendez, who runs a private artificial intelligence company focused on supply chain management, and Jonathan Mildenhall, Airbnb’s former chief marketing officer. Inc.

and co-founder of brand company TwentyFirstCenturyBrand.

Peloton said it plans to cut about $800 million in annual costs and cut capital expenditures by about $150 million this year. The company will slow down the development of its Peloton Exit Parkthe $400 million factory it announced in May to build in Ohio, and to reduce its delivery teams as well as the amount of warehouse space it owns and operates.

“Where the business has recovered from its skis is that it has built a cost structure as if Covid was the new normal,” Mr McCarthy said.

Mr Foley said the company was taking action to improve profitability and would share details with earnings. The company reported preliminary second-quarter revenue of $1.14 billion and said it ended the period with 2.77 million subscribers.

Write to Cara Lombardo at [email protected]