Fitness unicorn Cult.fit has fired around 120-150 employees in a cost-cutting drive, people aware of the developments told Moneycontrol. Mid to senior level employees were the most impacted by the decision, one of the people cited above said.
The decision to cut costs was because Cult.fit wants to lower its monthly cash burn and better its financial health. The unicorn, which counts Tata Digital and Zomato as investors, currently has a cash burn of around Rs 15 crore, sources told Moneycontrol.
“Cult.fit looks to lower its monthly cash burn by a few crores and bring it down to about Rs 10 crore. With that target in mind, the company has let go of employees from the mid to senior level category lower employee costs,” a person in the know told Moneycontrol.
Cult.fit is also realigning its business strategy to transition into an offline-heavy gym company, departing from its previous identity as a tech-enabled fitness startup. The decision to realign its business meant that employees from across divisions like Sugar.fit, Carefit, Cultfit and others are being let go.
Cult.fit was earlier known as Cure.fit and operates several brands under it.
The company confirmed to Moneycontrol that it has undertaken layoffs but did not specify the number of people impacted.
"As part of our regular annual operating planning process, we have reduced some redundant positions with the aim of streamlining operations. This is aimed at improving productivity and setting us up for full profitability in FY25. We have done this with thoughtful consideration and with the interest of creating long term value for our stakeholders," a company spokesperson told Moneycontrol.
Mukesh Bansal, co-founder of the company also informed employees about the layoffs.
The layoffs come at a time when Cult.fit plans to go public in the next 2-3 years. “Cult.fit is also preparing for a pre-IPO round in the next 12 months and has to show better unit economics before that,” a person aware of the developments told Moneycontrol.
In October 2022, Cult.fit had said it will list in 12-18 months but the timeline seems to have been pushed by at least another year as the company is yet to show results that will be rewarded by public market investors.
Founded by Bansal and Ankit Nagori in 2016, Cult.fit has raised over $650 million from investors like Accel, Temasek, Chiratae, Kalaari Capital and several others. Flipkart's Binny Bansal and actor Hrithik Roshan are among its angel investors, Tracxn, a private markets data provider, showed.
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