Weight loss and nutrition management company Jenny Craig will shut down its operations after four decades.
The company emailed its employees on Tuesday evening, stating that it would be closing down because it could not obtain further financing. Jenny Craig’s corporate and salaried field employees will finish their jobs on Friday, while the last day of work for hourly employees was Tuesday.
According to H.I.G. Capital, which acquired Jenny Craig for an undisclosed sum in April 2019, the company previously had around 500 stores that were either owned by the company or franchised in both the United States and Canada. It now has a workforce of just over 1,000 individuals.
A WARN Act notice was issued to corporate employees at Jenny Craig’s Carlsbad, California office last week, informing them that the office would shut down on June 24, 2023. However, the closure could occur earlier, potentially by Friday.
In addition, Jenny Craig provided employees with a FAQ document detailing that the company will be phasing out its physical operations to switch to an eCommerce model.
According to Bloomberg Law’s report last month, Jenny Craig was actively seeking a buyer. The company’s financial challenges were particularly troublesome over the past two weeks, which led two of its current corporate employees to believe that the company may file for bankruptcy before the end of the week.
Established in 1983 with the aim of helping people achieve weight loss, Jenny Craig became a well-known name in the industry. Its weight loss program included personalized menus created by skilled chefs and nutritionists to support individuals in reaching their fitness goals.
Over the years, the company enlisted the support of celebrities like Kirstie Alley, Valerie Bertinelli, Jason Alexander, and musician Mariah Carey to endorse the brand.
Unfortunately, the company’s good fortunes took a turn amidst increased competition from weight-loss drugs like Wegovy, Rybelsus, and Ozempic, which promise to aid in weight loss. To top that off, the company’s reliance on physical centers for client interactions deviated from consumers’ rising preference for online services in recent years.
Following reports of impending layoffs, a Jenny Craig representative informed NBC News last week that the company is preparing to enter the next stage of its business by adapting to the evolving preferences of modern consumers.
Meaning Jenny Craig is transitioning from a traditional physical retail setup to a more customer-centric, eCommerce-oriented approach. The spokesperson stated that more details will be revealed as the plans are solidified in the upcoming weeks.
The most recent message sent to employees did not suggest that switching to an eCommerce model was still in progress.
According to some Jenny Craig staff, there were no signs that the company was in decline until the previous two weeks. Just a month ago, the firm posted job vacancies on LinkedIn, and one employee claimed to have been given a salary increase and new training just a few weeks before.
Jenny Craig’s standard practice is to offer severance compensation to terminated staff, which is determined by their position and length of service with the company. Nonetheless, according to the FAQ memo sent out last week, it is improbable that such payments will be made.
In the termination message, the company notified its employees that they would receive their final compensation, including their total earnings until their last day of work and any accrued and unused paid leave.
NBC News was the first to break the news.
