In the afternoon of May 14, Joanne Patten sat at her computer at her home in Houston and connected to a Zoom call with her employer, WW International, the company formerly known as Weight Watchers.
She listened to her boss, reading a script, say that she and the other employees on the Zoom call were terminated at the end of the three-minute session. It was one of several Zoom calls that occurred simultaneously across the country, resulting in the dismissal of an undisclosed number of WW employees.
“I was like, what just happened? Said Ms. Patten, 59, who has been employed part-time for almost 11 years. “I called my territory manager and said,” What was it? I hope you are joking? Is that how you are going to fire me after all these years? »»
For WW employees, mass layoffs have been particularly painful because in recent years the company, under the leadership of its managing director, Mindy Grossman, and his senior investor and board member Oprah Winfrey, have moved from focusing on weight loss to a more complete approach to the broader wellness movement. In 2018, the company changed its five-decade-old nickname Weight Watchers to WW and introduced the slogan “Wellness That Works”.
“It’s supposed to be a caring wellness company,” said Patten, who said she would rather have been let go in a one-on-one conversation with her boss. “The way they did it, it was just heartless. “
WW’s CFO Nick Hotchkin declined to say how many employees were laid off during Zoom calls; the company had more than 17,000 employees at the end of last year, most of them part-time.
“It was impractical to have all of the conversations one-on-one,” said Hotchkin. He added that employees were encouraged to contact their managers for follow-up after the Zoom meetings.
In late April, WW announced plans to cut costs by $ 100 million due to the coronavirus pandemic. Redundancies and likely permanent closings in some locations are part of these savings, said Hotchkin.
“Even as we begin to gradually reopen some of our sites, we know our business will continue to be affected by this crisis,” he said. “It is in this context that we decided to restructure our studio activity and to make substantial changes to our corporate structure and our workforce.”
Patton and others said the company’s wellness strategy over the past few years has not been embraced by some long-time members who, like millions of people over the years, were registered to lose weight.
When the pandemic forced studio meetings of members in person to Zoom calls, attendance fell, several former employees said.
“It was cancellation after cancellation after cancellation,” said Nicolle Nordman, 53, who worked for the company for 18 years in various jobs, before being laid off for Zoom. “Those of us who work in customer service joked daily:” How can there be someone to cancel? “”
The company said it has seen no spikes in cancellations. In the first quarter, which ended in March, subscribers to its more expensive studio and app plan fell 5%, while subscribers to its cheaper app plan increased by almost 16%.
Before the pandemic broke out, about a quarter of society members paid $ 44.95 a month to access workshops in its 800 brand-name studios or 2,500 locations such as community centers, places of worship, hotels and other spaces. Other subscribers pay $ 20.95 per month for the WW app. The company has made its digital platforms a priority, and Hotchkin said it is accelerating this change.
Weight Watchers became a global sensation after its founding in 1963 by Jean Nidetch, housewife from Queens. Millions of people have turned to her weight loss programs.
The program’s point system – three for a boneless, skinless chicken breast or 10 for a chocolate iced donut – gave them a road map to eat. Group meetings and weigh-ins provided support and responsibility.
“I believe in the program because it worked for me,” said Jennifer Remedi, a mother of three from La Grange, Illinois, who joined the team in 2000 and lost 70 pounds in 10 months. She then worked part-time for the company for 19 years as a receptionist, or “guide” in WW language, in several places, earning $ 25 to $ 35 per meeting for the two or three meetings she worked at. Saturday. The members she had seen for years had become friends.
“Working for Weight Watchers was a community issue,” said Ms. Remedi, 52. “It was a community of support, encouragement and friendship. You have helped people achieve their goals and, ultimately, you have helped them to be healthier and happier. That’s why I stayed there. ”
But the company struggled for years as consumers moved away from diet programs, preferring natural foods and health. Competition from free or inexpensive apps, like MyFitnessPal owned by Under Armor, has also kept customers away.
The company’s fortune seemed to improve in 2015 when Ms. Winfrey, who had often spoken of her battle with weight on her television show, paid $ 43 million for a 10% stake in the company and joined its board of directors. The day of Weight Watchers’ shares have doubled.
In Spring 2017, Weight Watchers appointed Ms. Grossman, executive director of the Home Shopping Network, and a friend of Ms. Winfrey’s, its executive director.
Grossman has been quick to reposition the company as a lifestyle and wellness brand. In 2018, Weight Watchers renamed itself WW, claiming that while remaining a weight management company, it would also strive to be the “global wellness partner”.
In June 2018, WW’s stock peaked at more than $ 101 per share.
Soon group meetings that had been free in nature and focused on topics such as eating strategies in Mexican restaurants – take only 14 tortilla chips from the basket, break them into small pieces on a napkin in front of you and don’t touch the basket again – have been replaced with larger themes like stress or exercise. Employees who asked their vacation or family members had to strictly follow the scripts.
“The members no longer had to weigh, and we went from subjects on what to do or how to manage the real world to these delicate, warm and fuzzy subjects which sometimes made me uncomfortable because I am not a psychologist or psychiatrist, “said Lynn Allred, 58, a teacher who worked part-time at Weight Watchers meetings in California for 15 years before being fired for Zoom. She stated that attendance at meetings where she worked had decreased.
In the spring of 2019, WW’s shares fell below $ 20 a share after Grossman said marketing efforts in January – WW’s largest subscriber month – were out of touch with customers .
“I think there needs to be more emphasis on weight loss,” Grossman said in a call with Wall Street analysts in February 2019.
Since then, according to company executives, they have been more successful in balancing WW’s wellness efforts with its weight loss mission in its marketing, noting that the company has reached a record low of five million subscribers. at the end of last year.
“When this crisis hit, ironically, we had a good start to the year,” said Hotchkin. “We introduced a new program and did a multi tour with Oprah Winfrey, which had a big impact on the business.”