Cult.fit, financed by Zomato, fires 150 workers to reduce cash burn

Cult.fit, financed by Zomato, fires 150 workers to reduce cash burn

Cult.fit, financed by Zomato, fires 150 workers to reduce cash burn

Moving away from its prior identification as a tech-enabled fitness startup, the unicorn—which now counts Tata Digital as an investor—is achieving its business goal to change into an offline-heavy gym firm.

In a funding round headed by Zomato in 2021, Cult.fit, originally known as Curefit, has received $150 million.

Fitness enigma As part of a cost-cutting initiative, Cult.Fit has laid off between 120 and 150 workers, persons with knowledge of the situation informed Moneycontrol. One of the individuals cited above said that the decision had the greatest impact on staff at the middle to senior levels.

Cult.fit made the choice to minimize expenses because it aims to strengthen its financial position and lower its monthly cash burn. According to insiders who spoke to Moneycontrol, the unicorn, which includes backers Tata Digital and Zomato, is now burning through capital at a rate of roughly Rs 15 crore.

"Cult.Fit wants to cut its cash burn each month to around Rs 10 crore, down from a few crores now. In order to reduce labor expenses, the corporation has let go of mid-to senior-level category staff, a source with knowledge of the situation informed Moneycontrol;

Along with reorienting its business plan, Cult.fit is becoming less of a tech-enabled exercise firm and more of an offline gym operator. Employees from Sugar.Fit, CareFit, CultFit, and other departments are being let go as a result of the company's decision to reorganize.

Cure was the previous name of Cult.fit.suitable and runs many brands beneath it.

The business acknowledged to Moneycontrol that layoffs had occurred, but it withheld the number of employees impacted.

"We have eliminated some unnecessary roles as part of our routine yearly operational planning process in an effort to streamline operations. The goal of this is to increase output and put us in a profitable position by FY25. We've completed this. It's been done with careful consideration. A representative for the business told Moneycontrol that "creating long-term value for our stakeholders" is of importance.

With aspirations to go public in the next two to three years, Cult.fit has announced layoffs. A source with knowledge of the situation told Moneycontrol, "Cult.Fit is additionally getting ready for a pre-IPO round in the next 12 months alongside the fact that it will have to show better unit economics."

Cult.Fit had said in October 2022 that it will list in 12 to 18 months, but it seems that the deadline has been extended by at least a year since the firm has not yet shown the necessary results to be listed. Investors in the public market will reward you.