Austin-based fitness franchise F45 Training, which has attracted high-profile investors and partners, is preparing to lay off about 80 employees nationwide, according to state filings.
The layoffs affecting about 30 Austin employees were reported by the company in a WARN letter sent to the Texas Workforce Commission. A federally mandated notice that employers must provide to state governments in the event of a major layoff.
The job cuts come as the Australian-founded company faces a recession on many fronts. After he founded F45 Training in 2013, CEO and Chairman Adam Gilchrist stepped down. Ben Coates will serve as interim CEO pending the appointment of a formal CEO. Gilchrist will remain on the board as a director, and the board will appoint a new chairman, the company said.
The 45-minute workout in F45 Training combines high-intensity intervals, circuits and functional training. This exercise is designed for customers looking for a less expensive option than one-on-one personal training. The company is now based in Austin and uses a franchise model.
As of March 2022, the company had approximately 1,900 studios in 69 countries. In a written statement, F45 Training said it expects to open an estimated 1,000 to 350 to 450 studios this year. Its investors, brand ambassadors and partners include Mark Wahlberg, Cindy Crawford, Magic Johnson and David Beckham.
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The company raised $325 million in its July 2021 initial public offering, and F45 Training sold over 20 million shares for a market value of $1.46 billion. Today, the company’s stock has fallen to $1.75 from his $16 at the time of his IPO.
“When we founded F45, our primary goal was to change people’s lives by creating the best workouts in the world,” Gilchrist said in a statement. “Thank you to all the staff who have been working tirelessly since our founding. Finally, we are eternally grateful to our franchisees who provide F45 members around the world with the best workouts in the world every day.”
The F45 training cited “ongoing macroeconomic uncertainty” as the reason for the pullback.
“The company is realigning its corporate operations based on its updated growth outlook that prioritizes profitability and cash flow generation,” the company said. This includes reducing operating costs and strategically streamlining corporate functions, including reducing the global workforce by approximately 110 people. “
Chris Payne, Chief Financial Officer of F45 Training, said: “While we expect growth to continue, market dynamics are having a greater-than-expected impact on a franchisee’s ability to obtain capital to develop his new F45 location.”
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Additionally, Payne said recent stock performance has made it difficult for franchisees to take advantage of the loan facility announced earlier this year.
“While downsizing the company has been a very difficult decision, taking proactive steps to reorganize resources is an important step in putting the company on track for long-term and sustainable success. “We believe that once these cost savings are fully realized, the company will be able to generate positive free cash flow on a normal basis. Despite the headwinds, F45’s business fundamentals remain strong.” .”
