Brutal staff email reveals global weight loss company Jenny Craig plans to shut down operations

One of the most instantly recognisable weight loss companies on the planet is going out of business, according to a devastating leaked email.

Weight loss empire Jenny Craig will reportedly close down its operations “due to its inability to secure additional financing”.

According to a leaked staff email seen by NBC News, the company will close down after four decades as an industry leader, with many employees set to work their final day this Friday.

The notice informed workers they would receive a “final pay cheque, including your full compensation earned through your last day of work and all accrued, unused paid time off”.

It’s no secret the firm had been struggling recently, with Bloomberg reporting last month that it was searching for a buyer.

The publication revealed that the company had amassed around $US250 million ($374,000,000) in debt and was even weighing up filing for bankruptcy if a buyer could not be found.

People walk past a Jenny Craig weight loss store in Miami, Florida. Picture: Joe Raedle/Getty Images North America/Getty Images via AFP

NBC News reports that staff at one California office were notified last week that their workplace would close on June 24, or possibly as soon as this Friday, in a grim sign of what was to come.

All workers also reportedly received a notice revealing physical operations would be winding down but that Jenny Craig aimed to evolve into an e-commerce model.

A US employee told Bloomberg it was possible that franchise-owned locations may remain in operation.

‘We’ve had nothing’: Aussie staff hit out

As news of Jenny Craig’s collapse spreads across the world, a Sydney employee told news.com.au Aussie staff were “finding it frustrating that there is no news out there on the Australian side of the business”, and hit out at the company for leaving local workers in the dark as speculation about the firm’s future ran wild.

“From what I can find we are backed 100 per cent by USA so we must be closing too?” the employee questioned.

“I am an employee in Sydney, and we’ve had NOTHING from up above except an internal directive sent out yesterday.”

The internal directive sent to some Australian workers on Wednesday from the head of Jenny Craig’s human resources in Australia and New Zealand, caused confusion as it instructed staff to tell clients it was a case of business as usual despite the US news – but also included an ominous warning against speaking to the media.

It started by thanking them “for all your support with reassuring your teams in light of the challenges confronting the North American business”.

“I know conversations are already being had with clients who are coming to our team about the US issues and that these are being dealt with appropriately,” the letter reads.

“However, to further assist with these conversations if/when they come up, we’ve pulled together some sample dialogue for the team to refer to:

“If a client expresses concern about the situation with Jenny Craig North America, reassure them by saying: ‘Those issues relate exclusively to Jenny Craig North America. We’re a separate business here in Australia and New Zealand and our continued focus is to provide the highest standard of customer service to our existing, like yourself, and future clients. We’re here to support you on your journey’.”

Australian Jenny Craig staff received this internal directive on Wednesday.

The directive also states that “under no circumstances” are Centre Leaders to respond to questions from media representatives.

A spokeswoman told news.com.au in a statement late on Thursday morning that Jenny Craig would “currently continue” to support clients in Australia.

“You may have heard the news that Jenny Craig USA are intending to file for bankruptcy,” the statement reads.

“While this is unfortunate news for our colleagues in the USA, the Jenny Craig operations here in Australia and New Zealand do act independently.

“Here in Australia and New Zealand we currently continue to operate and support our clients. “As always, our priority is to continue providing the best possible service. We thank you for your continued patience and support during this time.”

However, the employee questioned the statement, telling news.com.au they were unaware of anyone “independently” backing the Australian business and revealing the company had shut down the sales program Salesforce two weeks ago when the USA did.

“To me that’s a direct link from the top down to us here in Australia,” they said.

Meanwhile, Australian singer and Jenny Craig ambassador Jason Owen – who lost 29kg with the weight-loss giant – weighed in on the news on social media on Thursday.

“It’s certainly sad news coming out of the US about the JC team there. Jenny Craig operates independently in Australia and New Zealand and are continuing to support me an their clients here,” he said on Facebook.

“My Jenny Craig family has completely changed my life … and millions of others’ lives. I’m very proud to be an ambassador for this amazing company and I’ll continue to shine awareness on the life-changing work they do.”

Writing on the wall

Just last week, the company was insisting it was more or less business as usual, with a spokesperson telling CNN that it was moving to e-commerce as a result of global trends, with staff members unaware of the serious troubles behind the scenes.

“Like many other companies, we’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce driven model,” the spokesperson said at the time.

“We will have more details to share in the coming weeks as our plans are solidified.”

According to NBC, employees were unaware of the company’s downward spiral.

The weight loss and nutrition business juggernaut was bought by H. I. G Capital in 2019 and currently employs around 1000 people, with around 500 company-owned and franchised stores in the United States and Canada and 600 centres across the globe, including in Australia.

Comedian Magda Szubanski was previously a Jenny Craig spokeswoman.

Jules Robinson committed to losing 20kg after signing on as the new face and body of Jenny Craig in 2021. Picture: Supplied

It was founded in 1983 in Melbourne, Australia by American husband-and-wife duo Jenny and Sidney Craig, who expanded the weight loss program into the US in 1985.

Over the years has attracted millions of clients worldwide with specially-designed menus to help customers shed the kilos, and has signed up countless household names to represent the brand, including the late Kirstie Alley, Mariah Carey and Seinfeld’s Jason Alexander.

Local celebrities have also flocked to Jenny Craig, including Magda Szubanski, Married At First Sight star Jules Robinson and Australian Idol’s Casey Donovan.

There has been widespread speculation that Jenny Craig had potentially been impacted by the soaring popularity of weight loss drugs such as Ozempic in recent times, as well as the push towards online services and away from in-person businesses.

However, despite the challenges the company was facing, it had been posting job openings online as recently as April, adding to the shock felt by staff members.