The company that makes NordicTrack exercise bikes has promised bonuses and raises to employees after laying off hundreds of people earlier this month – sparking outrage among laid-off workers, with some refusing to sign their severance agreements, learned The Post.
IFit – which, like rival Peloton, has been hammered as a pandemic-driven spike in demand for home fitness equipment has waned – has nearly halved a workforce of 2,500 over the past 11 months, recently slashing 376 employees on November 14.
Now the latest group of laid-off workers have until Monday to sign their redundancy 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 got nothing – while health insurance was immediately cut. By signing the document, workers would also waive their rights to unpaid bonuses and unused vacation days, according to a severance agreement viewed by The Post.
“We thought we were getting bonuses and raises [last] week,” a terminated employee who had been with the company for just under two years told The Post. “It was shocking and we feel they baited and traded us.”
The day after the layoffs, meanwhile, management told the remaining 1,200 employees that their managers were finalizing recommendations in November and December for salary increases retroactive to September 1. according to an internal memo obtained by The Post.
“It’s not common after massive layoffs for a company to give bonuses to the remaining employees, but it’s probably intended to improve morale,” labor attorney Darren Oved, a partner at The Post, told The Post. Oved & Oved. “Mass layoffs can hurt productivity and create ‘survivor’s guilt’.”
Some of the fired employees contacted lawyers and contacted government agencies while more than 40 started a Slack channel titled “legal” to discuss legal action against iFIT.
“Whenever there’s been a layoff, their strategy is to buy employee loyalty to stay with the company with bonus offers, but they clearly took advantage of that loyalty by deception,” he said. said a former employee.
When the last big layoff took place in February, co-chairman Mark Watterson said “those of you who remain are the creme de la creme and who we’ll be moving forward with,” but the company has continued to cut jobs afterwards, according to several former employees.
Some believe that iFit deliberately reduced its workforce in staggered installments to avoid giving its employees advance notice under the Worker Retraining Adjustment and Notification Act.
The WARN Act “is intended to give an employee transition time to adjust, plan, or get another job,” 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 under certain circumstances, including when the total number of positions cut is at least 33% of the workforce.
Management’s response was that “iFit’s force reduction scope is below Federal WARN Act minimums,” according to an email from iFit’s human resources manager, Andrew Stevens, that The Post reviewed.
Some companies “try to stagger layoffs to avoid triggering those thresholds,” Oved said. “But he can still be held liable under the WARN Act if the layoffs 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 honored written agreements with affected employees.”
The company, she added, “has faced the challenges of the pandemic, supply chain disruptions and inflation. In order to successfully continue our 45-year history, IFIT has had to shape the business to meet the realities of today’s marketplace, and as a result teammates have been impacted. IFIT is committed to treating impacted teammates fairly and with respect throughout this transition.”
The company’s product engineering division was particularly hard hit, with 80 of 140 positions cut, former employees told The Post. “We were solely responsible for the support and development of the app to run iFIT’s workouts and content,” said an employee at the department.
A former employee said he was frantically trying to get a new job with health insurance because his wife was being tested after finding a breast lump.
“The timing was ruthless,” he said. “The pain and suffering of it was so unnecessary.”
“I have decided not to sign [severance agreement] document,” said another employee, who was promised a bonus when he was hired earlier this year. “You waive your rights to pursue legal remedies and obtain your unpaid bonus and PTO days.”
IFit said in the internal memo that it is a billion-dollar company and is undergoing a $100 million restructuring, a third of which is related to wage and salary cuts.
Owned by private equity firms – L Catterton, Pathlight Capital and Pamplona Capital Management – which invested $355 million in the company earlier this year – iFit has grown from a family business to a backed business by institutional investors.
The Watterson family, led by founder and longtime CEO Scott Watterson, has controlled the company for 45 years.
Investors took control in March when Watterson was named CEO. Since then, other senior executives have left the company as it became clear that it would not go public as it had previously planned.
Watterson remains the company’s largest shareholder. His four sons also work for iFit, but some family members, including Chase Watterson, a customer experience manager who had worked for the company since its inception, have been fired, according to his LinkedIn profile.
“I have also been affected by the reduction and it is time to leave iFIT,” he posted on LinkedIn.
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