Tonal just shed over a third of staff to help it become a ‘self-sustaining and profitable business’

In order to grow at a more sustainable rate, the company laid off a third of its workforce.

The layoffs were confirmed by the company in a statement. In light of the macroeconomic climate and global supply chain challenges, the costs of our business have gone up.

It is not clear if there is a concentration of cuts or if any high-level executives are leaving the company.

Aly Orady, the company's CEO, sent a memo to staff after announcing the cut.

We grew our teams quickly to keep up with demand and competition. Our growth was supported by outside investors with large sums of capital, but our costs were rising due to global challenges.

The capital markets deteriorated faster than anyone expected, which led to a shift in how Tonal plans to build in the future. This is an excerpt.

When it came down to it, we had to face these realities:

To make it through what’s ahead, we must prioritize becoming a self-sustaining and profitable business. Becoming self-sustaining requires us to scale back significantly, both operationally and in our headcount.

Our costs, growth, and investment levels were shaped by and built for a hyper-growth trajectory. We owe our members and our shareholders, including past and current employees, to be here for the long haul beyond the present economic downturn.

There is a minimum of two months of severance pay, healthcare benefits, and extended equity investing for those impacted.

I apologize to those leaving. The decision is not a reflection of your work or contributions, and I meant it when I said the Tonal team was the best team on the planet.

Peloton is an exercise equipment business that rose to prominence during the COVID-19s. Around 2,800 jobs were cut in February at Peloton, which was one of the first tech companies to make layoffs. The CEO stepped down and became an executive chairman after the workforce reduction. Peloton announced this week that it would stop building its own products just three years after buying a facility for that purpose. Similar to today's announcement, the reasoning behind Peloton's shift was vague, but related to a focus on simplification of the supply chain.

The Tonal EC-1