Outgoing Peloton CEO John Foley takes the blame for Peloton's crash: 'We own this. I own this.'

• Peloton is firing over 2,800 employees and CEO John Foley is stepping down, the company announced Tuesday.
• During the company's earnings call, Foley pinned blame for Peloton's recent issues on himself.

Due to an ongoing downturn in its business, Peloton is firing over 2,800 employees and scrapping plans for a new factory.

Moreover, CEO and founder John Foley is stepping down — a move that some Peloton investors were calling for back in January.

During the company's second-quarter earnings call, which happened shortly after the announcements, Foley spoke for the last time as Peloton CEO.

"We've made missteps along the way," Foley said on the call. "To meet market demand, we scaled our operations too rapidly. And we overinvested in certain areas of our business."

In the last few months, Peloton has seen a major downturn after home fitness products spiked in popularity during the height of the coronavirus pandemic.

With gyms re-opening as vaccine rates increased, Peloton's business took a huge hit: The company's market value has dropped from $50 billion last year to $9.8 billion as of early February 2022.

"We own this. I own this," Foley said. "And we're holding ourselves accountable."

Former Spotify and Netflix CFO Barry McCarthy is taking over Foley's position as CEO, and the company is instituting a massive "restructuring" across all departments — the layoffs of over 2,800 people — to shore up overhead.

"Over the last several months, our executive management team has worked diligently to identify the areas that needed adjustment," Foley said on the call. "This was a very difficult decision for our management team, who've had the privilege of working alongside many of these team members from the beginning, but it was a necessary one to get back on track."

The layoffs impacted approximately 20% of Peloton's corporate workforce.

Impacted employees are being offered a one-year subscription to Peloton's service, in addition to a "meaningful cash severance allotment" that's determined "based on job level and tenure" with the fitness company, alongside several other benefits.

In the wake of the news on Tuesday morning, Peloton's stock value leapt 12% to its highest value since late December.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.