According to CNBC, the company employs about 750 people, compared with a little more than 110 before the Covid-19 pandemic, Chief Executive Officer Aly Orady said in an interview.
Orady also emphasised the need to be profitable, particularly as the company eyes an initial public offering.
As per the CEO, Tonal has not been profitable in the past. But the job cuts will put the company on track to make money in a matter of months.
Tonal, which sells wall-mounted workout devices for $3,495, experienced rampant growth in 2020 and 2021 as consumers were stuck at home and seeking ways to break a sweat.
But for now, Tonal is tapping the brakes. It joins a list of businesses — including competitor Peloton — that are reducing headcount to trim expenses and readjust to new levels of consumer demand for their products.
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Businesses are simultaneously grappling with red-hot inflation on everything from raw materials to fuel to workers’ salaries, and many are preparing for an economic slowdown, even if a recession isn’t certain.
“As we head into a recession — and many of us believe we are headed into a recession — it is really important that we become a business that’s here for the long term,” Orady said
“What we are doing is effectively going from a hypergrowth business … to more of a sustained-growth business,” Orady added.
Tonal did not disclose exactly how much money it plans to save through the layoffs. It also did not say if its valuation has been adjusted in the private markets.
The company was last valued at $1.6 billion after it raised $250 million in a Series E funding round led by Dragoneer in March 2021.
