The company that makes NordicTrack exercise bikes promised bonuses and raises to employees after laying off hundreds earlier this month, sparking outrage from laid-off workers, with some refusing to sign their severance agreements, it has learned. The Post.
Ifit – what as arch rival Peloton has been hammered as the pandemic-driven surge in demand for home fitness equipment has subsided — nearly halving a workforce of 2,500 in the past 11 months, recently cutting 376 employees on november 14.
Now the latest group of laid-off workers have until Monday to sign their severance agreements, and dozens are refusing to do so.
The Logan, Utah-based company offered a week’s severance pay for every year worked (those hired this year received nothing), while health insurance was immediately eliminated. By signing the document, the workers would also waive their rights to unpaid bonuses and unused vacation days, according to a severance agreement seen by The Post.
“We thought we were getting bonuses and raises [last] week,” a laid-off employee who had been with the company just under two years told The Post. “It was shocking and we felt like we were cheated and changed.”
Meanwhile, the day after the layoffs, management told the remaining 1,200 employees that their managers were finalizing recommendations in November and December for pay increases retroactive to September 1. Employees who survived the cuts can also receive bonuses “based on personal and company performance,” according to an internal memo obtained by The Post.
“It’s not common after mass layoffs for a company to give bonuses to remaining employees, but it’s probably meant to boost morale,” employment lawyer Darren Oved, a partner at Oved & Oved, told The Post. “Mass layoffs can hurt productivity and create ‘survivor’s guilt.’”
Some of the fired employees reached out to lawyers and government agencies, while more than 40 started a Slack channel titled “legal” to discuss how to take legal action against iFIT.
“Every time there has been a layoff, their strategy is to buy the loyalty of employees to keep them with the company with bonus offers, but they have clearly taken advantage of that loyalty with deceit,” said one former employee.
When the last big layoff occurred in February, then-co-chairman Mark Watterson said “those of you left are the cream of the crop and who we’re going to move on with,” but the company continued to cut jobs afterwards, according to several former employees.
Some believe iFit has deliberately scaled back in 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 to, plan for, 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 required by federal law in certain circumstances, even when the total number of positions cut represents at least 33% of the workforce.
Management’s response was that “the scope of iFit’s force reduction falls short of the federal WARN Act minimums,” according to an email from iFit’s head of human resources, Andrew Stevens, who reviewed The Post.
Some companies “try to stagger layoffs to avoid triggering these threshold numbers,” Oved said. “But you may still be liable under the WARN Act if the firings occur within the same 90-day period.”
In a statement to The Post, iFIT spokeswoman Colleen Logan said the company’s layoffs complied with all local and federal laws “and complied with written agreements with affected employees.”
The company, he added, “has had to deal with the challenges of the pandemic, supply chain disruptions and inflation. To successfully continue our 45-year history, IFIT had to shape the business to meet today’s market realities and teammates were affected as a result. IFIT is committed to treating affected teammates fairly and respectfully during this transition.”
The company’s product engineering division was hit particularly hard, with 80 of 140 positions cut, former employees told The Post. “We were solely responsible for supporting and developing the app to run the iFIT workouts and content,” said a department employee.
A former employee said he is desperately trying to get a new job with health insurance because his wife is having tests after she found a lump in her breast.
“The timing was relentless,” he said. “The pain and suffering from this was so unnecessary.”
I have decided not to sign the [severance agreement] document,” said another employee, who was promised a bonus when he was hired earlier this year. “You waive your rights to take legal action and get your bonus and PTO days that have not been paid.”
IFit said in the internal memo that it is a billion-dollar company and is undergoing a $100 million restructuring, one-third of which is related to wage and salary cuts.
Owned by private equity firms: L Catterton, Pathlight Capital and Pamplona Capital With management investing $355 million in the company earlier this year, iFit has grown from a family business to one backed by institutional investors.
The Watterson family, headed by founder and longtime CEO Scott Watterson, has controlled the company for the past 45 years.
Investors took control in March when Watterson he was ousted as CEO. Since then other senior executives left the company since it became clear that it would not go public as it had previously planned.
Watterson remains the company’s largest shareholder. His four children also work for iFit, but some family members, including Chase Watterson, a customer experience leader who had worked for the company since its inception, have been laid off, according to his LinkedIn profile.
“I’ve also been affected by the reduction and it’s time to leave iFIT,” he posted on LinkedIn.
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