Cutbacks come after the fitness firm delayed an initial stock offering that promised to make millions for Latter-day Saint apostle Gary E. Stevenson.
Two months after it postponed a debut stock offering on Wall Street, Utah-based iFIT Health & Fitness launched a round of staff layoffs just weeks before Christmas.
Several employees told The Salt Lake Tribune they received no notice before the Dec. 3 firings, when the billion-dollar firm let go of an undisclosed number of employees across multiple departments — at its Logan-based headquarters and among those working online across the country.
Julie Tukuafu, a 31-year-old single mother of two, said she had been part of the fitness technology company’s creative and marketing team for eight years without a blemish on her record. She was let go via Zoom at her home in Arizona, where she works remotely.
Based on contacts since with other laid-off colleagues, Tukuafu said, she estimated that anywhere from 100 to 500 people across several departments had been dismissed, all with little explanation as to why after recent reports from managers the company was doing “better than ever.”
“That’s why people are upset, because it contradicts everything that they’ve been telling us for the last year,” said Tukuafu, adding that some were receiving severance packages worth the equivalent of five to eight weeks of pay, depending on their tenure.
“While they might say that they care about the people first,” she added, “they absolutely do not.”
Company spokesperson Colleen Logan did not respond to several email and phone inquiries from The Salt Lake Tribune. But, in a written statement provided to Logan’s Herald Journal, she said that “a small reduction in workforce occurred to align with business needs as we continue to grow as a fitness technology company.”
“We empathize with those impacted and appreciate their contributions to the company,” the newspaper quoted her as saying. She reportedly declined to disclose how many employees were affected.
A competitor to Peloton, iFIT is the maker of the popular NordicTrack and has seen its fortunes grow in recent years, due partly to heightened interest in working out at home during the coronavirus pandemic. Merchandise sales of its interactive fitness products — including exercise equipment, apparel and footwear — topped a gross value of $2.8 billion in 2021.
The company had more than 6.4 million customers in 120 countries as of October, its public filings say.
“They were one of the few industries that were absolutely thriving during COVID,” Tukuafu wrote in an email.
In disclosures to the U.S. Securities and Exchange Commission earlier this year in advance of the firm’s aborted IPO, iFIT said it had “over 2,500 employees [including] more than 600 research and development professionals, with engineering teams across three continents.”
The company also told the SEC its future success depended “on key personnel, the loss of whom would harm our business.”
“Competition for employees in our industry is intense, and we may not be successful in attracting and retaining such personnel,” iFIT told federal regulators. The firm said it was contemplating hiring new employees, particularly in its finance department, after the IPO was completed.
Tukuafu said she was being encouraged to apply for other jobs at iFIT even after being abruptly fired.
Public documents also revealed that several executives at iFIT stood to receive massive windfalls as part of the IPO — including one current top leader of The Church of Jesus Christ of Latter-day Saints and another who had recently stepped down from his church position.
As co-founder of one of the firm’s early predecessors, Gary E. Stevenson, a member of the Utah-based faith’s Quorum of the Twelve Apostles, was nominated to become a board director and stood to gain as much as $911.9 million for nearly 43.4 million iFIT shares he accumulated through the years.
Robert C. Gay, formerly a member of the church’s Quorum of the Seventy, was also nominated to the iFIT board. With nearly 18 million shares, according to SEC documents, the firm’s proposed IPO share price of $21 would have lifted his holdings in iFIT to roughly $385.9 million in value.
A spokesperson for the church said in October that the 66-year-old Stevenson got a special exception — “resulting from his legacy shareholdings and his role as a co-founder of the corporation” — from a long-standing church mandate that top leaders in the faith avoid serving on corporate boards.
Spokesperson Doug Andersen said such exceptions were rare and granted under exceptional circumstances on a case-by-base basis. The 70-year-old Gay was appointed to the church’s First Quorum of the Seventy in 2012. Church leaders said during the faith’s fall General Conference that Gay had been granted emeritus status, similar to semiretirement from the role’s day-to-day duties.
The IPO got delayed just before it launched due to what company officials said were “adverse market conditions.” There has been no word on when iFIT might reinitiate the stock sale.