Peloton co-founder and Chief Product Officer Tom Cortese is leaving the company

• Peloton co-founder and Chief Product Officer Tom Cortese is leaving the company after nearly 12 years.
• He'll be replaced by Silicon Valley veteran Nick Caldwell, who previously held positions at Twitter, Google and Microsoft.
• "After nearly 12 years of pouring myself into Peloton and serving our Members, I have decided it is time to move on and create space for new perspectives," Cortese said in a news release.

Peloton co-founder and Chief Product Officer Tom Cortese is leaving the company and will be replaced by longtime Silicon Valley veteran Nick Caldwell, the company announced Tuesday. 

Cortese, who helped found the connected fitness company alongside former CEO John Foley in 2012, will move into an advisory role beginning Nov. 1, the company said. 

"After nearly 12 years of pouring myself into Peloton and serving our Members, I have decided it is time to move on and create space for new perspectives," Cortese said in a news release.

"I'm eager for new growth for Peloton and for me personally, but I'm also excited to support and watch this next phase of Peloton's evolution. I could not be more proud of what we have accomplished, together."

Caldwell most recently served on the board of tech companies Bitly, HubSpot and True Search and previously did stints at Twitter, Google, Reddit and Microsoft, where he worked for nearly 16 years at the start of his career, according to his LinkedIn profile. 

He'll oversee global product development and will start the new role Nov. 1. 

"I want to thank Tom for his tireless dedication since launching Peloton nearly 12 years ago as a Co-Founder of the business. We simply wouldn't be here today without his contributions," CEO Barry McCarthy said in a statement. "Nick brings impressive engineering, design, and product experience to the Peloton team. Nick joins us at an exciting time as we lean into growing our subscriber base online and on our connected fitness hardware."

Churn at the top

The news comes more than a year into McCarthy's stint as Peloton's CEO. Since he took over, he has tapped Leslie Berland as the company's marketing chief and Dalana Brand as its chief people officer, among other hires. Both Berland and Brand were executives at Twitter before joining Peloton. 

With Cortese's departure, just two executives from Peloton's early days remain in its C-suite. Jennifer Cotter, the company's chief content officer, and Dion Camp Sanders, its chief emerging business officer, have both been with the company since Foley was at the helm. 

During an interview with CNBC earlier this year, Cortese recalled Peloton's early days and what inspired him and Foley to start the business.

"[In] 2013, so 10 years ago now, I was standing in the Short Hills Mall in New Jersey, my kids thinking that I was a mall retail guy, and we were selling people on the idea of being able to access energetic, remarkable fitness from the most convenient place on Earth: their home," Cortese told CNBC.

"The reason we were doing that is because what we saw happening in the real world … brick and mortar, was that people were turning to boutique studio fitness as something that was starting to excite them, right? So just going to the gym wasn't quite doing it … hence the Peloton Bike, and all that goes with it, was born."

Cortese started as the company's chief operating officer and took over as product chief in August 2021, according to his LinkedIn. Most recently, he was involved in the development of Peloton's app and the introduction of new product features on its connected fitness products.

Shift toward subscription

Back in the company's early days, Peloton was a product-first retailer that made the bulk of its revenue selling its pricey connected fitness products, including its Bike, Bike+ and Tread, as an alternative to the gym. 

However, in the years since, Peloton's products have undergone numerous recalls for a series of manufacturing flaws, some that left customers injured. 

Its Tread+ treadmill was recalled after a child was killed. The company has since been mired in fines and legal battles related to its products and their recalls. 

When Peloton last reported earnings Aug. 23, executives said they believe the most recent recall of its Bike seat post led to increased membership churn and was costing the company far more than it anticipated. 

These days, subscription revenue is Peloton's primary revenue driver. Earlier this year, it announced a massive brand overhaul that elevated Peloton's subscription offerings and signaled the company is just as invested in its app as it is its hardware. 

While the company frequently insists hardware is still one of its primary focus areas, new product development appears to have slowed.

When asked earlier this year if the company had plans to introduce new hardware, Cortese hinted at more to come.

"We maintain a strong hardware development team," he said. "They are certainly not twiddling their thumbs."