Barely one-and-a-half month after fitness and health startup Cure.fit raised USD 110 million in a round led by Singapore’s sovereign wealth fund Temasek, the Bengaluru-based firm has laid off hundreds of employees in India and the UAE. It has also slashed salaries of existing staff to cut costs amid the COVID-19 pandemic.
“The lockdown has affected all our business offerings and we do not see the situation improving for quite some time, considering the pandemic spread has affected all the markets we operate in,” Cure.fit said in a statement on Monday.
However, it did not disclose the actual number of employees it has laid-off.
“We have downsized our employee base across markets where we have shut operations and have initiated pay cuts across levels,” the statement said.
The company added that apart from providing a significant severance package and extended health insurance to the employees who were fired, it has created an emergency fund of INR 2 crore (USD 264,000) to support the affected employees in the coming months.
Founded in 2016 by Mukesh Bansal, co-founder of fashion retailer Myntra, and Ankit Nagori, the former chief business officer of Flipkart, Cure.fit offers fitness, health, and wellness services under multiple brands. It runs a chain of fitness centers under the brand Cult.fit, healthy food delivery service, Eat.fit, healthcare clinics called Care.fit, fitness clothing brand, Cult Sport, and mental wellness service under the brand Mind.fit. The company recently launched its own line of grocery products called Whole.fit.
The company, backed by high profile investors such as Temasek, Accel Partners, and Kalaari Capital, among others, has rapidly expanded to 130 locations with reportedly over 200 Cult.fit fitness studios over the last three years. Besides metro cities, the company created footprints in smaller cities like Indore, Amritsar, Kochi, Kota, Chandigarh, Jaipur, Surat, Jammu, among others.
“The unprecedented situation has forced us to close operations in small towns in India and the UAE,” it said.
It has also been pushing its brand through celebrity endorsements to reach the masses. To date, it has raised a total investment of USD 405 million.
According to the company, 90% of its trainers across its Cult.fit gyms business have been moved to a variable pay model to “tide over the crisis, while it has initiated the pay cuts across levels. The founders have taken a 100% pay cut, the management team, 50%, and the rest of the staff members, depending on their seniority, have been slapped with 20 to 30% pay cuts.
A Reuters report, citing sources, said the startup has laid off “as many as 800 of its staff across the country and permanently closed a number of fitness centers,” and that the company had roughly 5,000 employees across India, including those at its Cure.fit and Eat.fit units offering medical services and healthy eating options.
Meanwhile, local media Economic Times said, aside from shuttering some of its fitness centers under Cult.fit, the company has also shut down a number of its cloud kitchen outlets under Eat.fit.
Ever since the company shut down its gyms and other fitness centers due to the nationwide lockdown since March 25, the company has been focusing on the services it can offer digitally. Consequently, the fitness startup has started live fitness sessions, including yoga and meditation on its app and website. The startup is reportedly gearing up to offer new digital fitness offerings such as tele-consultants for providing medical services at home. It also launched grocery delivery service to tap the increasing demand in this space.
“We are also doubling down on health food and home delivery of essentials while maintaining rigorous hygiene standards across all our kitchens,” the company said in a statement.
