Sweat cuts jobs, costs as people head back to the gym

Signs of trouble emerged last year. Now fitness guru Kayla Itsines’ platform Sweat will slash jobs and cut costs.

Digital workout platform Sweat will slash jobs and cut costs as gyms and fitness centres bounce back from Covid-19 lockdowns and US parent company iFIT shakes up its global fitness empire.

The Advertiser has been told more than 30 staff will be laid off at Sweat’s Adelaide headquarters, reducing local staff numbers to 45, down from close to 100 at the company’s peak before the sale to iFIT last year.

Sweat did not confirm or deny the exact numbers, with a company spokeswoman saying it was still going through a consultation process with employees.

In a statement the spokeswoman said a review of the company highlighted the need to reduce costs and “right-size” the organisation.

“Sweat, along with others in the digital fitness industry, has experienced recent headwinds due to changes in customer demand and the effects of gyms returning to pre-pandemic operating levels as pandemic restrictions have eased,” she said.

Sweat co-founder Kayla Itsines remains the face of the brand.

“Following on from the review, there will be changes to our organisational structure which will result in redundancies across the business. Sweat is consulting with impacted employees and these discussions will be finalised next week.

“As a business, these are difficult decisions but they are responsible and necessary for Sweat to improve its operational efficiency and strengthen business performance.”

The spokeswoman said Sweat would remain headquartered in Adelaide, where glamour duo Kayla Itsines and Tobi Pearce established the first version of the Sweat app in 2015.

Home exercise exploded during the pandemic as gyms around the world closed and people looked for ways to stay active from home.

But the demand evaporated once gyms reopened and health concerns about the pandemic eased.

Signs of trouble at Sweat emerged last year when it was revealed the company made a $9.5m loss in 2020-21 as subscription revenue in the US - its largest market - slumped by 16.1 per cent to $45m.

At the time Pearce, who has since departed the company, said Covid-19 had fuelled fierce competition in the US digital fitness market, and coupled with the reopening of gyms, it had an impact on US subscriptions.

“The performance did drop in the US,” he said at the time.

“I think as well as a result of Covid, the increased competition and the rate of increase in competition was very significant.”

US fitness giant iFIT took over Sweat in June last year for a reported $400m.

The acquisition came with the promise of significant investment in the Sweat brand, development of new and improved training content, and a commitment to building the brand’s presence in key international markets.

However iFIT has been battling with its own challenges in recent months.

The latest in a series of global layoffs was announced earlier this week, with the company blaming “a challenging macro-economic environment, including increased supply chain costs that have diminished our operating margins”.

A messy legal battle with exercise-bike rival Peloton was settled earlier this year amid a shake up of the company’s chief executive and senior management.

Pearce and Itsines, both personal trainers, shot to fame after forming the Bikini Body Guide fitness program in 2015.

It evolved into Sweat, which became one of the world’s largest digital fitness training platforms for women.

The duo split in 2020 but remained business partners until Pearce’s departure from the business in February.

Itsines remains the face of the brand and is still involved in the running of the business.