Fitness equipment makers Tonal, backed by Amazon, is laying off nearly 35% of its workforce, affecting all levels of its business. The Chief Executive Officer, Aly Orady, reportedly said that the company has not been profitable and the job cuts will put the company on track to make money.
According to CNBC, Orady said that the company employs about 750 people, compared with a little more than 110 before the COVID-19 pandemic.
Tonal, which sells wall-mounted workout devices, experienced rampant growth in 2020 and 2021 as consumers were stuck at home and seeking ways to work out. But for now, Tonal is tapping the brakes.
It joins a list of businesses -- including competitor Peloton -- that are laying off staff to trim expenses and readjust to new levels of consumer demand for their products.
Businesses are simultaneously grappling with red-hot inflation on everything from raw materials to fuel to workers' salaries, and many are preparing for an economic slowdown, even if a recession isn't certain.
"As we head into a recession -- and many of us believe we are headed into a recession -- it is really important that we become a business that's here for the long term," Orady said
"What we are doing is effectively going from a hypergrowth business to more of a sustained-growth business," Orady added.
Tonal did not disclose exactly how much money it plans to save through the layoffs. It also did not say if its valuation has been adjusted in the private markets.