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Peloton keeps losing top instructors, adding pressure on the fallen fitness unicorn

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Fitness unicorn Peloton appears to be facing a steeper hill to climb as it looks to turn around its sagging financials.

Earlier this month, popular instructors Kristin McGee, Kendall Toole, and Ross Rayburn announced they were leaving.

In a tearful Instagram post on June 17, McGee said she will leave Peloton after six years there to spend more time focusing on “my family and my boys.” She added that all her content will remain online on demand and that fans can still reach out to her.

Days earlier, Toole announced on Instagram that would be leaving and thanked fans and Peloton for the “incredible life-changing opportunity,” and also telling followers to “stay tuned for what’s next.”

“As with all businesses who work with professional athletes, Instructor contracts are a normal and ongoing part of the Peloton process,” a company spokesperson said in a statement to Fortune. “During our most recent round of contract discussions, three of our beloved Instructors have chosen to leave to explore new opportunities. Each has their own special magic that has helped build the incredible Peloton community we have today; we are truly grateful and wish them all the best. Our door will always be open to them, so this is not a final goodbye, but rather, we hope to see them later. As we think about our future, we are excited about the opportunity to bring new talent to our Instructor roster to continue offering a best-in-class experience to our Members.”

To be sure, the company is retaining the vast majority of its talent. A source familiar with the talks said 54 out of Peloton’s 57 instructors have resigned their contracts.

Top Peloton instructors have been known to have devoted followings. So the departures of three high-profile stars could be a major blow as the company tries to revive its business, which soared during the pandemic as people looked for ways to exercise at home.

But since the pandemic ended, times have been tougher. In its fiscal third-quarter report last month, Peloton said total revenue fell 4% from a year earlier to $717.7 million as sales of its connected fitness products dropped 14%. Meanwhile, members dipped 1% to 6.6 million, and ending paid app subscriptions sank 21% to 674,000.

Peloton also announced last month that Barry McCarthy was stepping down as CEO, president and a board member, just two years after taking over from founder John Foley. That accompanied plans to lay off 15% of its staff, or about 400 employees, to cut spending.

Peloton’s fall has been almost as swift as its rise. At its peak in January 2021, Peloton’s market capitalization soared to over $45 billion when lockdown forced people to seek out virtual group cycling classes. It’s since lost more than 90% of its value and hovers around $1.3 billion. On Friday, shares closed at $3.61, a fraction of its all-time high above $170.

The company recently announced plans to partner with Hyatt to put its equipment in over 800 hotel locations, following a similar partnership with 5,400 U.S. Hilton hotels. But analysts have said its latest strategies won’t be enough.

The company’s stumbling blocks also included a series of controversies, including Sex and the Citystar Chris Noth—who was featured in a Peloton ad—being accused of sexual assault in 2021, forcing the company to pull the campaign. Peloton recalled its Tread Plus treadmill that same year after it was involved in the death of a child. Foley stepped down as CEO in 2022, after rumblings that he failed to accurately forecast the market and act on product recalls. McCarthy laid off thousands of employees and outsourced operations to third parties to try to bring the company back to profitability.

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