Peloton announced on Thursday, May 2, that its CEO Barry McCarthy is stepping down amid plans to reduce its workforce by 15%, which equates to about 400 jobs. This development marks the fifth round of layoffs since 2021 for the fitness company.

Karen Boone, current Peloton chairperson, and Chris Bruzzo, a Peloton director, will serve as interim co-CEOs. In addition, Jay Hoag, a Peloton director, has been named the new chairperson of the board.

“On behalf of the Board, I want to thank Barry for his contributions to Peloton,” Boone said. “Barry joined Peloton during an incredibly challenging time for the business. During his tenure, he laid the foundation for scalable growth by steadily rearchitecting the cost structure of the business to create stability and to reach the important milestone of achieving positive free cash flow. With a strong leadership team in place and the Company now on solid footing, the Board has decided that now is an appropriate time to search for the next CEO of Peloton.”

Once celebrated as a pandemic success story, Peloton is now grappling with declining sales and subscriber numbers as consumers return to in-person gyms.

“Karen and Chris are two dedicated Directors committed to fulfilling Peloton’s mission, and the full Board and I have the utmost confidence in their joint leadership of the Company on an interim basis,” Hoag said. “The Board is focused on identifying a new CEO who possesses the ideal combination of skills, experience and vision to execute Peloton’s exciting next chapter and drive shareholder value.”

The company is looking to cut costs by more than $200 million, aiming to streamline operations and reduce its retail footprint.