Tonal, a company that offers wall-mounted fitness equipment, is laying off 35% of its workers, which will have an impact on all areas of its operations, CNBC reported.
According to Chief Executive Officer Aly Orady, there are currently 750 workers at the company, up from a little over 110 before the Covid-19 outbreak.
Tonal Boom Amid the Pandemic
In 2020 and 2021, Tonal saw explosive growth as a result of people looking for methods to get moving while they were stuck at home during the pandemic. It has received $450 million in funding to date.
Tonal's brand recognition increased as a result of signing LeBron James and Serena Williams to feature in its advertisements.
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Tonal Layoff
As previously mentioned, Tonal will retrench 35% of workers. Orady underlined the necessity of revenue, particularly as the business prepares to go public. However, he noted that the workforce cuts will put the company on track to generate a profit in a matter of months.
The CEO of Tonal stated that the company is committed to reducing the cost of customer acquisition, and that will be accomplished partly by reducing advertising costs. He claimed that Tonal cutting back on marketing was to blame for any slowdown in sales over the previous 90 days, albeit overall demand remained stable.
According to the company, each affected Tonal employee will get at least eight weeks of continuing salary in addition to health benefits through the end of September.
Additionally, Tonal stated in its memo to staff that it is providing faster stock option vesting, extended equity vesting for all employees to become shareholders, and a four-year opportunity for option holders to exercise their stock options.
CNBC said that the exact amount of money Tonal hopes to save through the layoffs was not made public. Furthermore, it didn't mention whether its valuation had been changed in the private markets.
Its Competitor Peloton Also Cutoff Workforce
It was highlighted that businesses are preparing for a slowdown in the economy even though a recession is not certain as they deal with heated inflation on everything from fuel to worker pay to raw materials.
Tonal joins a group of companies, including rival Peloton, that are laying off employees in an effort to reduce costs and adapt to changing levels of customer demand for their goods.
As per Engadget, Peloton, the most well-known company in the connected fitness sector, let go 2,800 workers, or nearly 20% of its whole workforce at the beginning of the year. It is worth noting that there are no instructors affected by the layoffs.
In addition to letting a chunk of its workforce go, Peloton also replaced its top executive. company co-founderJohn Foley was replaced with former Spotify COO Barry McCarthy, according to a separate Engadget report.
Just over a year ago, Peloton had tremendous popularity and even attained a market value of $50 billion in January 2021. It is currently valued at about $8 billion.
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