Beachbody will cut one-third of its workforce and overhaul its business model as part of an organizational restructuring aimed at saving tens of millions of dollars.
The Southern California-based fitness and nutrition company announced Monday that it is moving from a direct-to-consumer, multi-level marketing structure to a single-level affiliate program scheduled to launch in November.
In the old structure, independent distributors, or “coaches,” promoted and sold Beachbody products directly to consumers, recruiting others to coach, and earning commissions and sales through subscription sign-ups in the process. I was doing it.
The new model envisions what the company calls an “omnichannel sales channel approach” that is “simpler” and “more modern.”
In the affiliate model, the company financially rewards individuals who drive traffic, leads, and sales through promotional and marketing efforts.
The company currently employs approximately 580 people and plans to lay off nearly 200 people as a result of the restructuring.
Beachbody said it expects cost-cutting measures to reduce overhead costs by $54 million.
The company also said the layoffs will reduce its breakeven point from less than $430 million of annual sales to less than $225 million.
“While these steps are absolutely necessary to align our company with our new strategic direction, this is a painful decision,” Carl Daikeler, Beachbody co-founder and CEO, said in a statement. Part of it is saying goodbye to some teams.”
Beachbody said it expects sales for the third quarter ending Sept. 30 to be in the range of $97 million to $107 million.
