Fitness unicorn Peloton appears to be facing an even tougher challenge as it tries to turn around its struggling finances.
Earlier this month, popular instructors Christine McGee, Kendall Toole and Ross Rayburn announced their departure.
In a tearful Instagram post on June 17, Maggie said she was leaving Peloton after six years to devote more time to her “family and my boys,” adding that all of her content would remain online and on-demand and that fans would still be able to contact her.
A few days ago, Toure announced his departure on Instagram, thanking his fans and the peloton for giving him “an amazing opportunity to change his life” and telling his followers to “stay tuned to see what happens next.”
“Like all companies that work with professional athletes, instructor agreements are a normal and ongoing part of Peloton’s process,” a company spokesperson said in a statement. luck“During recent contract negotiations, three of our beloved instructors have chosen to leave to pursue new opportunities. Each brings their own unique magic that has helped build the amazing Peloton community that it is today. We are truly grateful and wish them the best. Our doors are always open to them, so this is not a final goodbye and we hope to see you again at a later date. As we look to our future, we are excited about the opportunity to add new talent to our instructor roster to continue delivering a best-in-class experience to our members.”
To be sure, the company is retaining much of its talent: 54 of Peloton’s 57 instructors have terminated their contracts, according to a source familiar with the negotiations.
Peloton’s top instructors are known for having devoted fanbases, so the departure of its three big-name stars could be a major blow to the company as it tries to rebuild a business that grew rapidly during the pandemic as people looked for ways to exercise at home.
But things have gotten tougher since the pandemic subsided: In its third-quarter earnings last month, Peloton reported total revenue fell 4% year over year to $717.7 million as sales of its connected fitness products fell 14%. Meanwhile, membership numbers fell 1% to 6.6 million and 21% to 674,000 as paid app subscriptions expired.
Peloton also announced last month that Barry McCarthy would step down as CEO, president and director, just two years after succeeding founder John Foley, and that the company plans to lay off 15% of its workforce, or about 400 people, in an effort to cut costs.
Peloton’s fall has been almost as swift as its rise. At its peak in January 2021, as lockdowns forced people to seek out virtual group cycling classes, Peloton’s market cap soared to more than $45 billion. Since then, its market cap has fallen more than 90% to hover around $1.3 billion. Shares closed at $3.61 on Friday, just a fraction of their all-time high of more than $170.
The company recently announced plans to partner with Hyatt to install its devices in more than 800 hotels, following a similar deal with 5,400 Hilton hotels in the U.S. But analysts say its latest strategy doesn’t go far enough.
The company’s roadblocks also included a series of controversies, including: Sex and the CityPeloton’s advertising star, Chris Noth, was accused of sexual assault in 2021, forcing the company to pull the ad. Peloton recalled its TreadPlus treadmill that same year after it was linked to a child’s death. Foley stepped down as CEO in 2022 after rumors circulated that he had failed to accurately predict the market and handled product recalls. McCarthy laid off thousands of employees and tried to turn the company into a profitable business by outsourcing operations to third parties.
This story originally appeared on Fortune.com.
