Following its stock plummeting last week, Peloton Interactive Inc. PTON is replacing its CEO John Foley and cutting 2,800 jobs. The Wall Street Journal reported Tuesday.

Foley, who founded has led the company throughout its 10-year existence, will stay on as executive chairman, according to the report.

Spotify's McCarthy New CEO

Barry McCarthy, the former CFO of Spotify Technology SA and Netflix Inc., will assume the position of Peloton CEO and president.

The job cuts will primarily be in corporate positions, affecting 20% of its workforce, the WSJ report says; instructors and video content producers will not be affected.

Two weeks ago, activist investor Blackwells Capital called for Foley's departure and for Peloton to find suitors, to help the compay deal with the dramatic drop-off in interest in home exercise equipment, as the COVID pandemic shows signs of ending.

Amazon and Nike were reported to be among several suitors, driving up Peloton's stock 21% yesterday to close at $29.75.

'Build a Really Remarkable Business'

"We are open to exploring any opportunity that could create value for Peloton shareholders," Foley told WSJ in an interview. "I have always thought there has to be a better CEO for Peloton than me. Barry is more perfectly suited than anybody I could've imagined."

McCarthy's strength is understanding content-based subscription models, whereas Foley is more capable of product development and marketing, according to WSJ.

McCarthy said that together with Foley, he hopes to bring Peloton to the nect level and "build a really remarkable business."

Other Executive Changes

William Lynch, president, will step down from that role but assume a board seat, and Director Erik Blanchford will leave the board.

Two new directors will be added: Angel Mendez, an AI entrepreneur who focuses on supply-chain management, and Jonathan Mildenhall, co-founder of TwentyFirstCenturyBrand and former CMO of Airbnd Inc.

Peloton said its restructuring will cut $800 million in annual costs and reduce its capital expenditures by $150 million in 2022.

It is also pulling back on a $400 million factory it was building in Ohio.

McCarthy admitted that Peloton had gotten "over its skis" in deciding to expand, without looking out ahead to the end of the pandemic and the tremendous increase in home exercise that it brought.

Peloton had a market valuation of roughly $50 billion a year ago. That had fallen to $8 billion last week. The stock was ticking down by $1.01, or 3.53%, in premarket trading.