After firing nearly half their workforce over the past 11 months, US-based fitness company iFIT promises bonuses and raises to employees, sparking outrage among sacked workers.
Dozens of indignant laid-off workers refused to sign their severance agreements which they had until Monday this week to sign.
By signing the document, workers would have to waive their rights to unpaid bonuses and unused vacation days, according to a severance agreement viewed by The Post.
The company, known for making NordicTrack exercise bikes, most recently slashed 376 employees on November 14th, nearly halving a workforce of 2,500.
They offered a week of severance for each year worked – those hired this year got nothing – while health insurance was cut off immediately.
iFIT website
“We thought we were getting bonuses and raises [last] week,” one laid off employee who’d been at the company just under two years told The Post. “It was shocking and we feel they bait-and-switched us.”
The day after the layoffs, meanwhile, management told the remaining 1,200 employees that their managers were finalizing recommendations in November and December for pay increases retroactive to Sept. 1.
Employees who survived the cuts may also receive bonuses “based on company and personal performance,” according to an internal memo that The Post obtained.
“It is not common after massive layoffs for a company to give bonuses to the remaining employees, but it is likely meant to improve morale,” labor attorney,
Darren Oved, a partner at Oved & Oved told The Post. “Mass layoffs can damage productivity and create ‘survivor guilt.’”
Some of the laid off employees have reached out to lawyers and contacted government agencies while more than 40 have started a Slack channel entitled “legal” to discuss taking legal action against iFIT.
“Every time there has been a layoff their strategy is to buy the loyalty of employees to stay with the company with offers of bonuses, but they have clearly taken advantage of that loyalty with deception,” said a former employee.
Another said that he is trying to get a new job with health insurance because his wife is undergoing tests for cancer.
“The timing was ruthless,” he said. “The pain and suffering of this were so unnecessary.”
Some believe iFit has deliberately downsized in staggered installments to avoid giving its employees advance notice under the Worker Adjustment and Retraining Notification Act.
The WARN Act “is intended to give an employee transition time to adjust, plan or obtain other employment,” Oved said.
A dozen workers sent a letter to the company suggesting that iFit should have given them 60 days’ notice as federal law requires in certain circumstances including when the total number of eliminated positions represents at least 33% of the workforce.
Management’s response was that “the scope of iFit’s reduction in force falls short of Federal WARN Act minimums,” according to an email from iFit’s head of human resources, Andrew Stevens, that The Post reviewed.
In a statement to The Post, iFIT spokeswoman Colleen Logan said that the company’s layoffs complied with all local and federal laws “and honored written agreements with impacted employees.”
Colleen Logan, Vice President, Public Relations & Corporate Communications at iFIT
The company, she added “has had to face challenges from the pandemic, supply chain disruptions and inflation.
In order to successfully continue our 45-year history, IFIT had to shape the business to meet today’s market realities, and as a result, Teammates were impacted.
iFIT is committed to treating impacted Teammates fairly and with respect throughout this transition.”
Previously a family-owned business, the company is now owned by private equity companies – L Catterton, Pathlight Capital and Pamplona Capital Management – which sank $355 million into the company earlier this year which might have prompted their firing measures.
Indeed, the company’s tryst to appease existing workers could not have come at a worse time.
