Cult.fit Job Cuts: Fitness Firm To Reduce Expenditure

In recent news from our source, Reader Wall, Zomato supported fitness company Cult.fit has reportedly laid off close to 150 employees from various departments. The objective of this act is to curtail expenditure and trim down the firm’s cash burn.

Impact on Mid to Senior level Employees

Reports suggest a number of the layoffs predominantly affected mid-level to senior-level employees of Cult.fit. The company is endeavoring to lessen its financial expenditures in a bid to enhance its future financial stability.

Core Investors: Zomato and Tata Digital

With key investors including Zomato and Tata Digital, Cult.fit’s current cash burn stands roughly at ₹15 crore. However, there are hopes within the company that these layoffs will reduce the amount to about ₹10 crore.

A source, quoted by Reader Wall, mentions, “Cult.fit aims to decrease its monthly cash burn by several crores, bringing it down to an estimated ₹10 crore. To achieve this, the company has decided to release employees, especially those in mid to senior positions to lessen staff-related expenses.”

Future Plans: Offline Gym Chain

The company, originally a tech-dependent online fitness platform, now plans to invest further in transitioning to a physical gym chain. This business restructuring is leading to job cuts, specifically within their online-oriented sections, namely Sugar.fit, Carefit, and Cultfit divisions.

Layoffs Precede IPO Launch

The layoffs have come just as Cult.fit disclosed plans for its initial public offering (IPO). The fitness company is also preparing for a pre-IPO round of funding scheduled for the next 12 months.

Widespread Job Cuts Across the Industry

Cult.fit’s layoffs follow a national trend which was instigated by Paytm, causing job losses across multiple tech companies. Layoffs.fyi reports state, within the first three weeks of January 2024 alone, technology firms in India have laid off nearly 8,000 employees.

Paytm led the first wave of layoffs this year, releasing over 1,000 employees across various departments. Shortly after, e-commerce giant Flipkart declared a reduction of 5-7 percent of its employees, an effort to recover from financial losses.

The Global Picture

In an international context, significant tech corporations including Google, Amazon, and Microsoft have collectively laid off thousands of employees. Google as the parent company has warned its staff about impending job cuts in the foreseeable future.