Peloton, the connected exercise bike and treadmill provider, has announced plans to drastically cut costs including 2,800 job losses – with even its chief executive being told to get on his bike following a plunge in performance.

The firm – which enjoyed soaring demand for its subscription products during COVID crisis lockdowns – said it was cutting a fifth of its corporate staff as part of the restructuring though its teams of screen instructors would be spared.

The move, which also involves a further round of production cuts, is a response to a dramatic fall in sales since gyms reopened, tougher competition and bad PR following the death of a child.

Peloton had been facing intense investor pressure to overhaul its board and strategy.

Peloton said its CEO, co-founder John Foley, would be succeeded by Barry McCarthy – a former chief financial officer of Spotify and Netflix, with Mr Foley assuming the role of executive chair instead.

He had become a particular target of activist investor anger over a plunge in market value below $10bn.

Peloton had been worth $50bn a year ago.

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The collapse in its shares was reported last week to have prompted takeover scrutiny from Amazon and Nike amid growing calls for Peloton to put itself up for sale.

Investment firm Blackwells Capital accused Mr Foley of presiding over “gross mismanagement” and lacking credibility.

Peloton shares were 9% down in pre-market deals.

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