Tata and Zomato backed Cult.fit fires 120-150 employees to lower cash burn

Cult.fit, a fitness unicorn, has layed off around 120-150 employees to cut costs as per media reports.

The decision to cut costs was to lower its monthly cash burn by a few crores and bring it down to about Rs 10 crore. The unicorn backed by Tata Digital and Zomato as investors, currently has a cash burn of around 15 crore, the reports further revealed.

Mukesh Bansal, co-founder of the company also informed employees about the layoffs.

Formerly known as Cure.fit, it is undergoing a realignment, shifting its focus from a tech-enabled fitness startup to an offline-heavy gym company. This transition has prompted the company to make significant changes, leading to the departure of employees across various divisions, including Sugar.fit, Carefit, Cultfit, and others.

"As part of our regular annual operating planning process, we have reduced some redundant positions with the aim of streamlining operations. 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," as per the reports.

“The layoffs coincide with Cult.fit's plans to go public within the next 2-3 years. In preparation for a pre-IPO round in the coming 12 months, the company aims to demonstrate improved unit economics. Despite initially stating in October 2022, that it would list within 12-18 months, the timeline appears to have been extended by at least another year due to the need for the company to exhibit results that would be well-received by public market investors,” the reports further stated.

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