Beachbody fitness company lays off a third of its workforce, shifts to affiliate model

Beachbody will slash a third of its workforce and overhaul its business model as part of a restructuring that seeks to cut tens of millions of dollars.

The Southern California-based fitness and nutrition company announced on Monday that it would transition from its direct sales multi-level marketing structure to a single-level affiliate program that is due to launch in November.

Under the old structure, independent distributors, or “coaches,” promoted and sold Beachbody products directly to consumers and recruited others to become coaches — in the process earning commissions and sales through subscription sign-ups.

The new model envisions what the company calls an “omnichannel sales channel approach” that is “simpler” and “more modern.”

Under the affiliate model, the company will financially reward an individual for driving traffic, leads or sales through promotional and marketing efforts.

The company, which currently employs around 580 people, will lay off nearly 200 as a result of the restructuring.

Beachbody said that it anticipates the cost-cutting measures will save the firm $54 million on overhead.

The company said that the layoffs will also lower its revenue break-even point from less than $430 million of annual revenue to less than $225 million of annual revenue.

“While these steps are absolutely necessary to align the Company with its new strategic direction, the painful part of this decision is saying goodbye to some of our team,” Carl Daikeler, CEO and co-founder of Beachbody, said in a statement.

Beachbody said its expects revenue in third quarter ending Sept. 30 to land in the range of $97 million to $107 million.