So, you might have heard some news about Tonal, the company that makes those fancy strength training machines. Well, let’s break it down in a way a 6th grader can understand.
Is Tonal Going Out of Business?
Okay, so first things first. Tonal is not really going out of business, but they are making some big changes. They decided to close their studio in Los Angeles, and that means some of the coaches who worked there are losing their jobs.
Why Are They Doing This?
Tonal wants to make more money and be a successful fitness company, just like Peloton and iFIT. But in 2022, they had a tough time. They had to say goodbye to more than 35% of their staff and shut down their original studio and trainers. It was a bit of a bumpy ride, and it made people worried.
What’s Tonal’s Plan Now?
Tonal is actually a pretty big deal in the fitness world. They’re worth about $1.6 billion, and famous athletes like Maria Sharapova and Mike Tyson like their $3,000 strength training program. But here’s the thing: when Tonal started, it didn’t have live classes or a big library of workouts like Peloton.
What’s Tonal Live?
Tonal realized people like live classes, so they started something called “Tonal Live.” It’s like taking a class with a real teacher, but through your Tonal machine. This was a good idea because Peloton does it too, and it’s super popular.
What’s Happening in New York?
Tonal is closing its LA studio, but they’re opening a new one in New York. They hired more coaches there to have live classes for folks on the East Coast. So, they’re not giving up; they’re just changing locations.
What’s the Deal with Coaches?
Tonal has some coaches who work full-time, and others are like freelancers. They’re trying to figure out how to make everyone happy. Unfortunately, some of the LA coaches will only work part-time now.
What’s the Big Problem?
Now, here’s the tricky part. Tonal is facing a lawsuit from their main supplier, Foxconn. You know how Tonal got super popular during the pandemic? Well, they didn’t expect things to slow down, so they had to make some tough choices, like letting go of coaches and closing the studio.
So, that’s the story with Tonal. They’re making changes to keep going and be even better in the future.
What’s Happening with Tonal’s Layoffs?
Hey there! Tonal, the company that makes those cool workout machines, is making some big changes, and I’ll explain it to you like you’re a 6th grader.
Why Are They Laying Off People?
So, Tonal decided to reduce the number of people working for them by 35%. Why? Well, they noticed that not as many folks were buying their stuff, and they think things might get even tougher in the future. They’re not the only ones going through this – even Peloton had to let go of 570 people in 2022.
What Does the CEO Say?
The boss of Tonal, Aly Orady, says they really want to make money, especially because they want to become a public company (like being on the stock market). Tonal hasn’t been making money since they started in 2015, but Orady believes that by cutting jobs, they’ll start making a profit soon.
Orady says, “We need to make sure our business can last a long time, especially if things get tough, and we think they might.” They used to be all about growing really fast, but now they want to grow more slowly and steadily.
How Are They Cutting Costs?
Tonal is trying to spend less money, especially on advertising to get new customers. When a company grows super fast, it can be a problem if they’re not making enough money. Orady says that investors in the stock market don’t like that. So, they’re being careful with their spending.
Why Are Sales Slowing Down?
Orady says that one reason Tonal’s sales are slowing down is because they’re not advertising as much. But there are other reasons too. People are going on summer vacations, going back to the gym, and prices are going up because of inflation, so they have less money to spend.
What About the Prices of Their Machines?
The cost of Tonal’s workout machines went up by $500. So, if you want one, it now costs $3,495.
What Happens to the Employees Who Lost Their Jobs?
The folks who lost their jobs at Tonal will still get paid for at least eight weeks, which is kinda nice. They’ll also keep getting health insurance until the end of September.
What’s the Good News?
Tonal is doing something nice for their workers who own shares in the company. They’re giving them more time to use their stock options, which is like a special deal for workers who own a piece of the company.
What Does the CEO Say to the People Leaving?
Orady wants to make it clear that this decision to lay off people isn’t because they weren’t good at their jobs. He thinks the Tonal team is amazing and that this move is just about making the company better.
So, sometimes companies like Tonal have to lay off some workers, and it’s not always a bad thing. But there are also some things that are making people worry about Tonal’s future.