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Peloton CEO quit after laying off 2,800. A lesson about how not to lead (2022)
- shoulderfake 3y ago[dead]
- fourseventy 3y agoWhen there are layoffs and the CEO keeps his job people complain, when there are layoffs and the CEO leaves people complain. I think the takeaway is that people just like to complain
- hobs 3y agoIt is genuinely difficult to suddenly lose your job and reallocate all your time and energy on new projects, I don't see anyone wouldn't complain about that.
- realinfo 3y ago[flagged]
- ethanbond 3y agoOr people like complaining about bad things and layoffs are bad?
- lnsru 3y agoCEO gets always the money. For example: https://www.cnbc.com/amp/2014/04/17/fired-yahoo-exec-gets-58m-for-15-months-of-work.html https://www.cnbc.com/amp/2014/04/17/fired-yahoo-exec-gets-58... While workers get in best case severance package and unemployment benefits.
- ceejayoz 3y agoI one worked at a publicly traded company that did furloughs; we got emails from the CEO along the lines of "I feel your pain, I'm taking one too". Six months later the execs got bonuses for successful cost-cutting. Those bonuses were roughly equal to the amount the two-week furloughs saved across the company.
- jacquesm 3y agoThe 'one' referred to yours.
- GoToRO 3y agoPeople complain because they were paid like employees but they were treated like contractors. The rest doesn't change their situation: the jobs are not back just because the CEO left.
- deleted 3y ago[deleted]
- hef19898 3y agoThe downside of at-will employment. Personnaly, I don't see any upsides, but I lost count of how often the employee protection in, e.g., Europe were brought up as, besides taxes, the main reason why start-ups and tech companies outside the US just aren't competitive. How things change, right?
- heavenlyblue 3y ago> the main reason why start-ups and tech companies outside the US just aren't competitive Citation needed
- hef19898 3y agoI never believed that, people claim it so...
- wahnfrieden 3y ago[flagged]
- ignoramous 3y agoThe takeaway is folks hate layoffs. Context matters though: Peloton is going to save $800m/yr in expenses by laying off 20% of its workforce. It is a viable bet to take in this case.
- b3lvedere 3y agoPeople (the workforce) complain about the total lack of respect and honesty. They couldn't care less if the CEO was on or off the company after such disasters, because the CEO usually has plenty of money to sustain his family for a decade without worrying too much. The workforce usually does not have that luxury.
- rendaw 3y agoI think when the CEO keeps his job people complain, when he leaves with a golden parachute people complain because they want him to be be punished/have skin in the game if he's going to lay off lots of people.
- PartiallyTyped 3y ago> TOKYO – Nintendo CEO Satoru Iwata is to take a 50 percent pay cut for five months to atone for losses at the game giant, while other senior executives, including Mario creator Shigeru Miyamoto, will forego 20 to 30 percent of their salaries. https://www.hollywoodreporter.com/lifestyle/arts/nintendo-ceo-take-50-percent-675228 https://www.hollywoodreporter.com/lifestyle/arts/nintendo-ce... People actually liked that and respect them a lot more. Is it symbolic? Given their wealth, yeah. But the problem is the golden parachute, a slap on the wrist and lots of money to leave.
- deleted 3y ago[deleted]
- hef19898 3y agoStill a far cry from folks like Neuman. And he is seen by somenas great example of a founder, opinions are different. Those Nintendo execs did the right thing so, I almost dare call it honorable.
- valdiorn 3y agoThis was just the CEO pulling the rip-cord on his Golden Parachute while the company can still make the payout. He knew the company was screwed, and it's entirely the fault of top leadership. they chose to make their own performance bonuses a priority over long-term business survival, by recklessly expanding during Covid; a strategy that literally everyone could have told them would not be sustainable.
- tough 3y agoGo big or go home Or go home with a big paycheck in this case
- linuxftw 3y agoI think the leadership has done an amazing job. They made something out of nothing. Selling exercise bikes for 100's of percent of markups, and then charging the clowns that buy them a subscription fee. > they chose to make their own performance bonuses a priority over long-term business survival, by recklessly expanding during Covid There was never going to be long term survival. Peloton was the latest 'as seen on TV' level of product, and once their 15 minutes of fame burns out, the name will be sold off to license cheap products.
- edgefield 3y agoAs a peloton owner, I strongly disagree. I have a peloton and went from not working out regularly, despite many attempts and gym memberships, to working out 4x a week (45 min or longer), going on 3 years now. I lost 15 lbs and in the best shape of my life. A $1,500 bike + $49/month subscription fee is a small price to pay for dramatically improved health and well being.
- whereistimbo 3y ago> The problem is, a business is more than just an idea. > Sure, every business starts with an idea, but a business is a product, and manufacturing, and supply chains, and financial reports, and customer service. > Once you involve other stakeholders, you become accountable. You become accountable to your customers, shareholders, and employees. That's a difficult thing for a founder who is used to exerting complete control over the thing they're building.
- tombert 3y agoThat's something I've said for a long time, after an argument with a "startup founder" who wanted me to code their entire website (from scratch!) with no help for a grand total of 2% equity (they got the remaining 98%, obviously) within basically no outside pay. I tried to get a bit more equity before I signed [1], explaining that it seemed like I would be doing the lion's share of the work, so I felt I deserved at least 10-15% equity. The "founder" then told me that they deserve most of the equity because they had the "idea" for this startup, and I told them that everyone has ideas! Ideas are useful and necessary but also extremely cheap and unspectacular. No one gives a shit about your "idea", at least not until you've actually done some actual work to objectively prove that the idea is good. [1] I was still somewhat young in my career and the red flags that I have now had not been fully developed.
- quickthrower2 3y agoYeah “someones offering me 100% equity for the same idea, see ya later!” springs to mind!
- tombert 3y agoYou know, I was dumb enough at the time, it's possible I signed a non-disclosure or non-compete before even having the meeting with this "founder". I genuinely don't remember, but it's possible, in which case if I had tried doing that I might have been sued. I don't know how successful they would have been.
- coldcode 3y agoThe hardest thing to realize starting a company is realizing when you are no longer sufficient to run the company. It's a big difference from starting something small to running something huge. It took Steve Jobs 10 years from being forced out from Apple to returning wiser. Some people can adapt and learn but from what I have seen, most people can only be good at small or large, but not both.
- tough 3y ago10 years building NeXT and Pixar and what not too
- hef19898 3y agoAnd at Pixar ot seems he learned a lot. As someone else pointed out, Jobs did more or less the same thing after his return he did before. The crucial difference being, he did it successful after, while before he almost killed Apple. That difference is hard to learn.
- matwood 3y agoIt's a point that people often forget. Going from 0->1 is a very different skill than 1->100 or bigger. Anyone who has started a company or been part of a small company then acquired by a larger company has felt this. It's also one of the reasons why so many acquisitions fail.
- valianteffort 3y agoDidn't Jobs bring in Sculley himself before getting ousted? It's not as though he was removed for any particular disaster, it was a coup. He returned and continued doing exactly what he had done before. Investing tons of resources into new products that have cutting edge features bundled into an aesthetic package.
- rickdeckard 3y agoI'd assume also a godlike human being like Steve Jobs evolved within the 12 years he was gone from Apple, so I doubt the person who returned was the same as the one that left.
- michaelsbradley 3y agoFeb 2022
- golemotron 3y ago> Foley never seemed to fully understand the responsibility that comes with leading people. He never seemed to understand what it means to be accountable. As a result, he's out of a job. He quit. That's accountable.
- ceejayoz 3y agoIf he forgoes his golden parachute, maybe. Even then, he'll be sitting pretty on his $20M+ a year he's already made.
- grantsch 3y agoWe need to wash out these capital destroying companies/managers/investors It's been like a race to light capital on fire across every industry up to now
- KoftaBob 3y agoAlthough you may not have been implying it, saying the capital is being "lit on fire" makes it sound like the money vanishes into thin air, when that's not technically the outcome. Even if the capital is given to/spent by a failing company, that money is at least still mostly spent on either materials or labor, which means it ends up back in the economy but somewhere else. Obviously not the most efficient use of that capital if its being invested in poor companies, but it's not vanishing into thin air.
- quickthrower2 3y agoBut it is a waste of resources if they have to chuck stock in a landfill. Probably not what is happening here. More like some winners and losers at the craps table.
- elliotto 3y agoIs this like one level of abstraction from the broken window fallacy? Investing money in window breaking companies rather than just windows (to be broken).
- JCM9 3y agoThe tombstone for Peloton will read “A great idea terribly executed by a poor management team”
- paulcole 3y agoWhat’s the great idea exactly? It’s an incredibly expensive (and low margin) exercise bike with an expensive (and high margin) monthly subscription. Charging a lot (and not making a lot) for something people probably won’t use for long isn’t a winning bet IMO.
- jsheard 3y agoThat's underselling their innovation, they also made an expensive treadmill that was uniquely prone to eating children and pets.
- paulcole 3y agoInspired by Stephen King’s The Mangler. https://www.baen.com/Chapters/9781625791108/9781625791108___3.htm https://www.baen.com/Chapters/9781625791108/9781625791108___...
- JCM9 3y agoPeople bought them in droves, and those that did broadly seem to enjoy it. I certainly have a few mega fans in my circle. The execution though was just terrible. They just kept pumping the things out after it was clear they saturated the market. They could have had an excellent business with a smaller market but instead didn’t know when to tap the brakes on their growth and built a bloated mess that may be impossible to unravel.
- softwaredoug 3y agoMy understanding of Peloton is they have very solid user retention numbers. 92% year over year [1] Where they struggle is growth. They are seen as a premium product. They're expensive. That's why they have tried creating new tiers, new products that aren't just the bike, and ways to get a subscription from just a streaming device. IMO they would have done better to stay a slower growing, niche, premium product but focusing on quality and profitability instead of growth. The price elasticity in the premium user base is pretty high, they probably would have paid more / bought other products. Then they can keep their cool, and create more organic demand, but not obsess over always filling that demand. Scarcity is a good thing for a premium product. I think, however, now they are stuck. They need growth. As n=1, I'm a long term peloton subscriber, and find it a really invaluable way to exercise. Not for everyone, but I get a lot out of it. 1 - https://backlinko.com/peloton-users https://backlinko.com/peloton-users
- deleted 3y ago[deleted]
- paulcole 3y agoImagine going on Executive News (EN) and seeing a bunch of c-suite people armchair quarterbacking the work of a programmer at a failing company.
- jasondigitized 3y ago“It’s obvious she should have shifted resources to tackling tech debt”.
- hotsauceror 3y agoMr. Musk would like a word with you. Please bring printed out copies of all your git commits for the last nine months.
- paulcole 3y agoIs this dumber than programmers thinking they have great insight into the work of CEOs?
- ChrisMarshallNY 3y ago> Foley never seemed to fully understand the responsibility that comes with leading people. He never seemed to understand what it means to be accountable. Seems to be a lot of that, going around.
- rjbwork 3y agoWhat does accountability even mean? You can drive a company into the ground, destroy the livelihoods of thousands, and make off with tens of millions of dollars. With no consequences whatsoever. What would accountability even look like under the system we have?
- ChrisMarshallNY 3y agoI can't tell you that, but I spent 27 years at a Japanese corporation. That taught me some serious personal accountability.
- TeMPOraL 3y ago> That taught me some serious personal accountability. Can you tell us more about it? Perhaps give some examples? I'm wondering how this situation would've played out under Japanese Corporate Personal Accountability culture.
- ChrisMarshallNY 3y agoWell, the Japanese (at least at the “old-fashioned” company I worked for) are big on making sure that every action item has a person responsible, along with dates of milestones. Their basic philosophy is “QCD,” which stands for “Quality, Cost, Delivery.” I think it actually was popularized by W. Edwards Deming, but it is likely older. Much of the stuff he introduced was regurgitated older techniques. “Quality” isn’t just about “is it good?”. It’s about how is the result measured? What are the measurement points? What are the units? What is the required bar? Etc. “Cost” is not just dollars (or Yen). It’s also man-hours, resources required, impact on/coordination with other projects, legal liability, risk assessment, etc. “Delivery” is what is to be delivered, and when? Accepting the delivery requires that it conform to the goals in “Quality.” Every action item has a person assigned, and they always need to be able to do a QCD report of their charge, at any time. They leave you alone, but the flip side of that, is that you are expected to be self-sufficient, and personally invested in/accountable for the task. If you drop the ball, you will be replaced. Frankly, it’s a pain in the ass, but stuff doesn’t fall through the cracks. https://en.m.wikipedia.org/wiki/Quality,_cost,_delivery https://en.m.wikipedia.org/wiki/Quality,_cost,_delivery
- deleted 3y ago[deleted]
- thinkingkong 3y ago[flagged]
- siva7 3y agoThis is a company that wouldn't have existed on this scale without the pandemic events and i don't think that leadership has done business-wise anything wrong except from a moral/ethical standpoint.
- mhb 3y agoHow do these golden parachutes (including the Wikimedia ones) make any sense in terms of incentives? Why would you want people to get a bonus for leaving? Fine, there's a negotiation with the high level employees and they ask for these things, but why not just give them more of something else instead? Like the usual things that reward tenure.
- ceejayoz 3y agoThe real incentive is "we all sit on each others' boards".
- rickdeckard 3y agoBecause if you want someone with skill to enter and run (or recover) your company, he won't do it for the sake of an adventure. He usually gets offered a big reward for achieving a goal he cannot fully judge yet, and a small compensation in case he fails (and ultimately leaves). If such a person chooses the "golden parachute", the "golden rocket" he had to commit on hiring was maybe unachievable in first place...
- mhb 3y agoThe pieces of compensation can all be negotiated. The board could make an offer that trades an element with a sensible incentive for staying (or even just more cash) for an element that is an incentive for leaving.
- fatherzine 3y agoThis cuts both ways. Are there /really/ so few 'someone with skill' people that can run your company, often into the ground? Or it's more of an incestuous network of very connected people that sign fat checks to each other, because shareholders are divided and remote, so nobody is paying close attention anyways?
- ProjectArcturis 3y agoThe second one.
- Satam 3y agoWhy do so many people feel they're owed a job? When founding a company the market certainly doesn't give the entrepneur a break. You get money, you work, that's the end of it. If someone was ever offered 2x their salary elsewhere, 99% of people would change jobs immediately. Businesses exist to make money and employees go to work to get a bit of that money. What's up with any other delusions?
- barelyauser 3y agoThey are not. Luckily AI will soon replace most of them and they can finally starve or something like that.
- Satam 3y agoAn insolvent business pays no salaries, and that's where you'll end up running an enterprise like a charity.
- nhylated 3y agoWorth a read in the context of the OP. https://www.businessinsider.com/slides-major-peloton-investor-eviscerates-ceo-john-foley-2022-2 https://www.businessinsider.com/slides-major-peloton-investo... Edit: link to original slide deck from Blackwell Capital if you want to skip the BI article - https://www.blackwellscap.com/wp-content/uploads/2022/02/BW_Peloton_Presentation_Feb072022.pdf https://www.blackwellscap.com/wp-content/uploads/2022/02/BW_...
- keeptrying 3y agoIf you’re an employee it’s going to be even more important to understand the business you join. When choosing a company you are defacto making a heavy bet on the CEO whether you like it or not. Especially in a Down economy. The only way to really understand this is to try to start your own company. It’ll be come instantly clear to you.
- shp0ngle 3y agoThe new CEO is a guy who pushed hard for Spotify Podcasts investment to them as a CFO. I don't know if that is a good credential honestly, given how much money Spotify poured into podcasting with not that much return. This is about the old CEO though, the article is from 2022
- saos 3y ago> The co-founder is stepping down from his role as CEO, but will remain on the board I mean. anyways is this a new round of layoff for them. I know they’ve done a few I’m the past
- joecasson 3y agoI was hoping for more from the article. It lacks pretty much any detail that might actually prove to be a lesson. It cites a layoff, a change in the stock price, and a few assumptions about how Foley generally isn't good at their business operations. Then it goes into vague platitudes about how a business is more than an idea. It doesn't mention anything of substance. Works for the clickbait though.
- ProjectArcturis 3y agoPeloton has always struck me as being the latest in a long line of fitness gadgets, from Nordic Track through Tae Bo DVDs and Bowflex. It was inevitable that the fad would end. The CEO rationally followed his incentives: lean into the fad, boost short-term profit at the expense of sustainability, and get that stock price up. Then quit and go buy an island somewhere. HIS plan worked perfectly.
- EvmRoot 3y agoWait, a company whose business is strapping ipads to exercise bikes and hooking them up to onlyfans has 28,000 employees? How is that possible?
- dahwolf 3y agoThis is what happens when you people are too young to have seen the Rocky movies. Rocky doesn't need an expensive bike + subscription. He uses his body and public parks to grind himself into fitness. Cost: zero. Fitness outcome: tons better than you.