Peloton is replacing embattled CEO John Foley and cutting about 20% of its workforce to help reinvigorate the flailing fitness company. Barry McCarthy, the former chief financial officer of Spotify and Netflix, will become its CEO and president, effective Wednesday. Foley will become the company’s executive chair, and wrote in a public note that the appointment is the “culmination of a months-long succession plan” he’s been working on with the board. The Wall Street Journal first reported the news. Peloton also announced it will lay off about 2,800 employees, including about 20% of its corporate positions. That was a move that Foley hinted at a few weeks ago. The company is also reducing the number of warehouses it owns and operates and expanding delivery agreements with third-party providers, that will help the company save $800 million in annual costs. “This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline,” the company said in a press release. Layoffs begin Tuesday and affected employees will receive a 1-year digital subscription to Peloton as part of their severance. Peloton also noted that it’s “winding down the development” of its first US factory in Ohio, which the company announced in May 2021, helping save $60 million. It noted that on-camera instructors and content “will not be impacted by the initiatives announced today.” “I love Peloton,” Foley said on the earnings call, but he admitted the company made “missteps,” including scaling its operations “too rapidly” and over investing in some areas of the business. “We own this. I own this and we’re holding ourselves accountable,” he said. Peloton’s board of directors is also getting a shakeup, including adding two new directors: Angel Mendez, a former executive at Cisco\n \n (CSCO), and Jonathan Mildenhall, a former chief marketing officer at Airbnb. Erik Blachford, who has served as a director since 2015, is stepping down from his role on the board. These changes indicate that Peloton wants to remain independent, rather than selling itself to a suitor — at least for now. Shares had gained 20% Monday following reports that Amazon\n \n (AMZN) and Nike\n \n (NKE) were exploring bids for the company and Wall Street chatter that Apple\n \n (AAPL) may be a potential suitor as well. Peloton’s shares have plunged more than 80% from their high in January 2021. They’ve come under renewed pressure in recent weeks following a report that the company had stopped manufacturing new bikes and treadmills. Blackwells Capital, an activist investor that owns less than 5% of Peloton, recently said it has “grave concerns” about Peloton’s performance and is calling on its board of directors to fire Foley and explore a sale. In a statement Tuesday, Blackwells said the changes don’t go far enough, arguing Foley has “proven he is not suited to lead Peloton, whether as CEO or executive chair, and he should not be hand-picking directors, as he appears to have done today.” Blackwells said it will keep pushing for a “strategic alternatives process to maximize value for the benefit of all shareholders.” In an note to investors Tuesday, Neil Saunders, managing director of GlobalData, said that Peloton is “now a business in crisis mode.” The changes are the “latest in a long string of maneuvers as it scrambles to get the business back on the rails.” “Peloton has spent vast amounts of money on stores, factories, warehouses and other facilities to service demand that is now unlikely to materialize. The first step of the new CEO, Barry McCarthy, should be to slash costs to right-size the business,” Saunders said, adding that a sale would “put Peloton on a much more secure footing.” Peloton reported its earnings Tuesday, slashing its fiscal 2022 revenue to $3.7 billion to $3.8 billion — a sharp decrease from its previously forecasted range of $4.4 billion to $4.8 billion. Shares rose about 30% in midday trading Tuesday.