Peloton CEO John Foley is stepping down and the company is planning to cut 2,800 jobs in reaction to falling demand for its home exercise bikes.

Barry McCarthy, a former senior executive at Netflix and Spotify, will take over as Peloton's CEO and president, according to a company announcement Tuesday morning. Foley founded and has led Peloton for the past 10 years.

The job cuts will affect 20% of Peloton’s corporate workforce.

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Peloton was a pandemic success story, as the company's home exercise bikes became a hot item when gyms closed down. Its stock was among the fastest-growing on Wall Street in 2020. Peloton moved into a 300,000-square-foot office on Manhattan's West Side and grew its headcount nearly 130% from June 2020 to June 2021, reaching about 8,700 global employees.

The company's recent troubles were outlined in an activist shareholder letter from Blackwells Capital calling for Foley's ouster. Peloton officials struggled to forecast the demand for its bike post-vaccine, the letter said, spent too aggressively and mishandled a costly and damaging federal recall effort for its treadmill product. Its share price has fallen nearly 80% from its high in spring 2021.

The company is scheduled to announce earnings later this afternoon. Its share price was down about 2% in pre-market trading following the announcement.

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