With gyms and studios closed, layoffs hit two of the fitness industry’s biggest platforms.
At MINDBODY, 700 employees of the company’s 2,000-member global workforce were notified via email that they had been laid off or furloughed.
“If you’d asked me, ‘is there anything that could possibly happen that could shut down all 60,000 of our customers at once?’, I would have said: ‘No, that’s impossible.’ But that is exactly what is going on right now.” – Rick Stollmeyer, MINDBODY CEO
- MINDBODY CEO Rick Stollmeyer said the deepest cuts were in the sales and marketing department.
- For his part, Stollmeyer will forgo a paycheck for the remainder of the year, and other executives are taking pay cuts.
- Stollmeyer said the cuts were necessary to “protect the business for the long term”, telling the San Luis Obispo Tribune: “If we didn’t take prompt action, we would burn through our cash reserves in a matter of months, and that’s just unacceptable.”
At ClassPass, staffing changes impacted 53% of a 700-person workforce.
“Today was the worst day of my career. We said goodbye to a lot of incredibly talented and decent colleagues as COVID-19 has obviously had a catastrophic impact on the fitness/wellness industry.” – Fritz Lanman, ClassPass CEO via Twitter.
- Hundreds of employees are being affected, with 22% laid off and 31% furloughed.
- According to CNBC, senior leadership at ClassPass relayed news of the cuts to staff via separate Zoom calls — one to a group whose jobs were safe and another to the group whose jobs were permanently or temporarily cut.
- ClassPass has seen 95% of its revenue dry up recently as nearly all of its 30,000 studio partners were forced to close.
Looking ahead: While MINDBODY and ClassPass have both pivoted to short-term digital fitness solutions, the longer gyms and studios remain closed, the more dire the situation becomes for these billion-dollar software providers.