Fitness Company Beachbody Is Restructuring and Cutting a Third of Its Workforce

Cutting a third of your staff is never a good thing, but Beachbody is attempting to position its latest move that way. The company announced that it would be restructuring along with the cuts, and now, many want to better understand what motivated the business decision.

The company, which previously worked on a multi-level marketing model, has now adjusted how it operates. Here's what we know about what happened to the company and why they decided to make the change.

Beachbody announced that it would be moving toward a single-level affiliate program instead of the current multi-level approach. According to their release announcing the news, the move will offer them a simpler approach to customer acquisition and will also directly reward sellers for their efforts. They are also relaunching a new web presence at BODi.com, which will be a hub for all of their sales.

President Michael Neimand is also leaving the company after his position was eliminated, along with 33% of the workforce. The company reportedly had roughly 580 employees prior to the restructuring.

One goal of the restructuring is to make sure that the company can make a profit with less overhead. The company “expects to significantly improve revenue break-even point, decreasing from less than $430 million in annual revenue to less than $225 million,” per its press release.

“The first phase of our turnaround is centered on lowering our infrastructure costs and re-architecting our financial model,” Mark Goldston, Executive Chairman of BODi, said. “We have successfully accomplished that goal – we’ve lowered our revenue break-even point by more than $400 million."

The Affiliate Program is set to launch on Nov. 1, 2024, and the MLM program is expected to wind down by the first of the new year.

Goldston said that the company made the change in part because they recognized that the MLM approach was outdated.

"We recognize that in light of today’s current market dynamics, as well as consumer preferences, the multi-level marketing distribution model is outdated and unsustainable. The evolution to the affiliate model offers a simpler, more modern approach to customer acquisition and will directly reward the seller for their effort," he explained.

Carl Daikeler, the CEO and Co-founder of BODi, also weighed in on the change, saying that the company had continued to survive in part because it's adaptable.

"Since our founding, we have had a long history of evolving our business model to adjust to dynamic market environments. We continue to adapt and evolve to optimize our sales channels," he explained.

"We believe that transitioning to the Affiliate Model will energize our network of Partners and new participants to stay more consistent with their own health and fitness objectives and share their results to help others live healthier and more fulfilling lives and get paid for it, now without the complexity of managing and recruiting a team of other Partners," he continued. Now, customers will have to adjust to this new model.