A 24 Hour Fitness gym in Fairfax, Va., earlier this month. The gym chain laid off staff remotely on Wednesday as it struggles amid the coronavirus pandemic.
Photo: Andrew Harrer/Bloomberg NewsGym chain 24 Hour Fitness Worldwide Inc. laid off an undisclosed number of employees in multiple states via a series of phone calls Wednesday, as the company struggles to address the financial impact of closures during the coronavirus pandemic.
In the latest example of a remote layoff, 24 Hour Fitness employees received an email Monday from Tami Majer, chief human resources officer, asking them to join a phone call Wednesday morning for “important company updates.” The message stated that employees would be compensated for one hour of work and asked them not to share the call-in details.
According to multiple employees interviewed by The Wall Street Journal, those who joined the calls learned they would be laid off, effective immediately. No information about severance or continued benefits was provided on the call, according to the employees.
The company later sent an email to laid-off employees, who included fitness instructors, personal trainers and sales staff. As a result of the economic impact from the coronavirus, 24 Hour Fitness “had to take the very difficult action of separating from employment many team members across the organization,” according to an email reviewed by the Journal. The message provided details about final paychecks, rehiring eligibility, unemployment insurance and continuing health benefits.
In a statement, 24 Hour Fitness said it was “re-evaluating staffing needs and the overall company’s club footprint.” The company declined to specify how many employees it laid off Wednesday.
“These are painful decisions, and we do not make them lightly,” said Chief Executive Tony Ueber.
Remote layoffs have become a hallmark of the coronavirus pandemic, as companies shed workers at a time when stay-at-home orders make in-person interactions impossible. In March, TripActions Inc., a corporate-travel startup based in Palo Alto, Calif., became one of the first companies to enact a significant layoff—nearly 300 employees, or 25% of its staff—over Zoom.
Many fitness centers and clubs around the country have closed since coronavirus case counts increased in the early spring and are now facing indefinite reopening schedules as public-health officials remain concerned about virus transmission and uncertain customer demand.
24 Hour Fitness is based in San Ramon, Calif., and operates more than 430 gyms in 14 U.S. states and has nearly 4 million members and, as of last month, more than 22,000 employees. The company recently reopened 20 locations in Texas, and it expects the majority of its gyms to reopen by mid-July, a spokeswoman said.
The Journal reported last month that 24 Hour Fitness is seeking financing to stay afloat through a possible chapter 11 bankruptcy filing that could come within weeks, according to people familiar with the matter.
The company, which is owned by private-equity firm AEA Investors and the Ontario Teachers’ Pension Plan, has been shopping for a potential bankruptcy loan of as much as $200 million. 24 Hour Fitness has been in talks with its landlords and plans to close some gyms permanently in bankruptcy, according to one of the people familiar with the matter.
The gym chain is “considering a broad range of options to ensure the long term sustainability and success of 24 Hour Fitness,” according to a Wednesday statement, adding that it wouldn’t comment publicly on strategic plans.
Write to Kathryn Dill at Kathryn.Dill@wsj.com
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