Fitness unicorn Cult.fit, backed by Zomato and Tata Digital, has initiated a cost-cutting measure resulting in the layoff of approximately 120-150 employees, primarily affecting mid to senior-level roles. The move is part of Cult.fit’s strategy to reduce its monthly cash burn, currently standing at around Rs 15 crore, with a target to bring it down to about Rs 10 crore.
Realigning Towards Offline Gyms: Cult.fit is undergoing a strategic realignment, transitioning from its tech-enabled fitness startup identity to an offline-heavy gym company. This shift in business strategy has led to layoffs across various divisions, including Sugar.fit, Carefit, and Cultfit.
Company Confirmation and Statement: The company confirmed the layoffs, emphasizing that the decision was made as part of its regular annual operating planning process to streamline operations. The spokesperson stated, “This is aimed at improving productivity and setting us up for full profitability in FY25. We have done this with thoughtful consideration and with the interest of creating long term value for our stakeholders.”
Preparations for IPO: Despite the layoffs, Cult.fit is gearing up for a pre-IPO round in the next 12 months. The company aims to exhibit improved unit economics as it plans to go public in the next 2-3 years. The timeline for the IPO has been extended by at least another year as Cult.fit works towards showcasing results that align with public market investor expectations.
Founders’ Insight: Mukesh Bansal, co-founder of Cult.fit, communicated the layoffs to the employees. Founded in 2016 by Bansal and Ankit Nagori, Cult.fit has garnered over $650 million in funding from investors like Accel, Temasek, Chiratae, Kalaari Capital, Flipkart’s Binny Bansal, actor Hrithik Roshan, and others.
