Who is Peloton's new CEO?

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Peloton (PTON) will look to a hardcore numbers man with major cred on Wall Street to stabilize its ship.

The company will appoint Barry McCarthy as CEO, replacing founder and CEO John Foley who will move into the executive chairman role the company said on Tuesday. Peloton will also slash 2,800 jobs as it seeks to better align costs with slowing demand for its connected bikes.

Peloton said it aims to achieve $800 million in cost savings while also slashing capital expenditures by $150 million in 2022.

"As a team with a culture as close and tight-knit as ours, saying goodbye to teammates at any level is hard. We aspire to be the best place to work and we know that doesn’t only mean making Peloton a great place to be at, but it also means ensuring Peloton is a place you are proud to be from. And, while today is one of the more challenging ones in our history, we are doing everything we can to ensure you can remain proud of what we have done together," Foley said in a letter to employees.

McCarthy, 69, is known on Wall Street circles as the innovative architect of Spotify's 2018 direct listing. At Spotify, he was CFO for several years before retiring in 2019. He is seen as having a major passion for the numbers, in part reflecting his long-time serving as Netflix CFO. McCarthy has also been a board member of delivery startup Instacart for over a year.

SUN VALLEY, ID - JULY 11: (L-R) Valerie McCarthy and Barry McCarthy, chief financial officer at Spotify, attend annual Allen & Company Sun Valley Conference, July 11, 2018 in Sun Valley, Idaho. Every July, some of the world's most wealthy and powerful businesspeople from the media, finance, technology and political spheres converge at the Sun Valley Resort for the exclusive week-long conference. (Photo by Drew Angerer/Getty Images)

A person familiar with McCarthy's time running Spotify tells Yahoo Finance McCarthy has extensive knowledge of subscription-based business models (which Peloton has), but respects the need to spend on content.

McCarthy's résumé and stature suggests Peloton isn't interested in selling itself, at least not until McCarthy fixes the company's finances and could fetch a better valuation than currently depressed levels.

All of this financial experience should serve Peloton well right now — in other words McCarthy is the right person at the right time.

The change at the top comes on the heels of a WSJ story late Friday saying Amazon and Nike have expressed interest in Peloton. Shares of Peloton surged 20% in trading Monday. The stock is back to trading above the $29 IPO price from 2019.

Any buyout of Peloton would arrive against the backdrop of a true mess that has sent shares plunging in recent months.

In a scathing letter in January, activist investor Blackwells Capital — which a source tells Yahoo Finance has amassed a less than 5% stake in the company — demanded Chairman, founder and CEO John Foley be immediately fired.

"Mr. Foley must be held accountable for his repeated failures to effectively lead Peloton," Blackwells Chief Investment Officer Jason Aintabi wrote in the letter. Aintabi lists a host of grievances with Foley, ranging from putting his wife in a key operational role at the company (apparel leader) to mishandling a safety recall for a treadmill.

Blackwells believes Peloton should put itself up for sale, highlighting Apple, Nike, Sony and Disney as potential suitors.

The letter materialized following a CNBC report that the struggling fitness company would temporarily halt production of its bikes and treadmills due to sluggish consumer demand. The company will reportedly stop producing its bikes for two months and treadmills for six weeks.

Peloton refuted the report, saying it hasn't halted all production. It also pre-announced quarterly results, which showed a miss on the number of subscribers added.

The company will announce its quarterly earnings after the close of trading Tuesday. Peloton stock slid nearly 3% in pre-market trading.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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