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said Tuesday that CEO will step down and the company will slash 2,800 jobs after seeing demand for its product wane.

Peloton quickly emerged as a 鈥減andemic winner鈥濃�攁 company that experienced the financial upside of the COVID-19 pandemic and its associated stay-at-home orders. With gyms closed and people looking to exercise at home, Peloton saw demand for its product鈥攁nd its stock price鈥攕kyrocket at the start of the pandemic.

But the company has faced hurdles in recent months. that Peloton is pausing production on its bike after demand slowed down. With more people vaccinated and returning to gyms, fewer consumers are willing to shell out roughly $2,000 for the company鈥檚 high-end stationary bikes.

With its stock price down, Peloton is cutting costs, including scrapping plans for a factory in Ohio.聽

Potential acquirers including and have reportedly expressed interest in the company. Activist investor called for Peloton to fire its CEO and look into selling the company, on Tuesday.聽

鈥淲hile Foley has supermajority B shares and ultimately controls the fate of聽Peloton, we believe shareholder pressure will build to solicit bids and sell Peloton聽to a strategic player with potential bidders , Amazon, and Nike likely in the聽蹿辞濒诲,鈥� of said in a research note to investors.

The bigger picture

In 2021, VC-backed companies in the fitness space raised nearly $5.9 billion in funding, up from around $2.4 billion in 2020, according to Crunchbase data. In other words, investors bet big on the category after 2020 proved that consumers would spend on fitness companies rather than or in addition to gyms. Dieting app led the pack with a $540 million funding round, and connected-fitness companies including and also raised nine-figure rounds.

But whether connected-fitness startups can maintain their momentum in 2022 remains to be seen.

All in all, Peloton鈥檚 issues could be just company-specific. The main issue is how fast Peloton grew, according to , CEO of fitness startup , a connected-fitness company for rowing. Peloton’s issues are their own and likely have more to do with certain management decisions, as the company is growing and has a high retention rate and brand loyalty, she said.

At-home fitness isn鈥檛 going anywhere, as gym-goers want a combination of at-home and in-person experiences, Knapp said.聽

鈥淧eople want to be able to work out at home but they also really want to be able to work out with other humans鈥�, it鈥檚 really not shocking that we鈥檙e recalibrating coming out of the past two years,” Knapp said.

In fact, CityRow has seen its machine sales, virtual class enrollment and in-person attendance spike as people have returned to gyms, according to Knapp.

鈥淕eneral fitness continues to grow like crazy,” Knapp said. “And digital fitness is a piece of it. If anything Peloton can really pave the way for a tremendous wave of connected fitness behind it.”

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