According to CNBCThe company employs about 750 people, compared to a little over 110 before the Covid-19 pandemic, Chief Executive Officer Eli Ordi said in an interview.
Ordy also emphasized the need to be profitable, especially as the company eyeing an initial public offering.
According to the CEO, Tonal hasn’t been profitable in the past. But the job cuts will put the company on its way to making money in a matter of months.
Tonal, which sells wall-mounted workout devices for $3,495, experienced massive growth in 2020 and 2021 as consumers stuck at home and looked for ways to sweat.
But for now, Tonal is applying the brakes. It joins the list of businesses — including competitors. peloton — who are reducing workforce to reduce expenses and adjust to new levels of consumer demand for their products.
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Businesses are simultaneously battling red-hot inflation on everything from raw materials to fuel to workers’ wages, and many are preparing for an economic downturn, even if the recession is not certain.
“As we go into a recession – and many of us believe we are heading into a recession – it is really important that we become a business that is here for the long term,” Oredi said.
Ordi said, “What we’re doing is effectively getting out of the hypergrowth business…
Tonal did not disclose how much money he plans to save through layoffs. It also did not say whether its valuation has been adjusted in private markets.
The company was finally valued at $1.6 billion in March 2021 after raising $250 million in a Series E funding round led by Dragoneer.