10:39 AM EDT, 05/02/2024 (MT Newswires) -- (Updates with CEO comment, impact on expenses, and stock price move in fourth to seventh paragraphs)

Peloton Interactive ( PTON ) said Thursday it is decreasing its global headcount by nearly 15%, affecting about 400 employees.

The company also said that President and Chief Executive Barry McCarthy is stepping down and will serve as a strategic adviser through the end of 2024.

Peloton Chair Karen Boone and Director Chris Bruzzo will act as interim co-CEOs while the board looks for a successor, the company said.

In a note to employees posted on the company website, McCarthy said the company had no other option but to reduce headcount "to bring its spending in line with its revenue."

Peloton needs to achieve positive free cash flow to attract lenders as it seeks to refinance its debt, he said.

When fully implemented, the restructuring is expected to reduce annual run-rate expenses by more than $200 million by the end of its 2025 fiscal year, the company said.

Shares of the company tumbled more than 10% in recent trading.

Price: 2.89, Change: -0.34, Percent Change: -10.40