a brazilian unicorn just got sent to the stone age, thanks a lot covid-19
[wd_hustle id=”InArticleOptin” type=”embedded”/]
Contxto – On April 3, Gympass—the corporate fitness platform that was born more than seven years ago in Brazil—announced some spectacularly bitter news: big layoffs.
Do you really need to ask why?
If you are reading this from home, which you have not left due to being in quarantine, I think it is quite logical to figure out the cause.
Now, Gympass joins the ongoing wave of unpleasant news for startups regarding coronavirus (Covid-19). That same wave that does not seem to be ending soon.
The bad news was unveiled during a meeting with the global CEO, César Carvalho. For this meeting, all Gympass employees were called to hear about the leadership changes and workforce restructuring.
- Related Articles: Tourism startup Co-founder faces “toughest day of his life”
In written correspondence, we received the following response:
“Gympass, like many other companies in the fitness industry, has been deeply affected by Covid-19,” stated the startup.
We had to make changes to cut costs, including the difficult decision to reduce the size of the workforce. Gympass is committed to supporting all affected […] Employees by providing severance, extended medical care, job search assistance, and continued access to an employee assistance program. This decision was made carefully, and as a last resort.
Back to the Stone Age
Perhaps the term “Stone Age” sounds catastrophic, but from the perspective of a proud bearer of the title “unicorn” from Latin America, it can be very difficult taking that step back.
Gympass‘s team cut its global workforce of 1,300 employees by 30 percent according to Forbes.
We are talking about roughly 390 dismissed employees.
It is important to note that Gympass has not confirmed the number of layoffs and is not currently intending to disclose it.
For Latin America, Leandro Caldeira was named CEO. At the moment there are no more details about the previous head of operations in Latam, Gustavo Diament. Whether he’ll be staying or not at Gympass has not been disclosed yet.
Gympass assures its solidarity with all the laid off employees promising to provide with the following:
- Severance pay
- Extended medical assistance
- Job search assistance
- Continuous access to an employee assistance program
Fortune has not smiled on Gympass who has reduced almost a third of its team.
It is also undergoing changes in the executive chain. The startup’s business is almost completely on hold until users can return to sports centers. Moreover, Gympass also has responsibilities to cover with former workers.
It may take a long time for us to see the Brazilian giant return to where we saw it a couple of months ago.
Nonetheless, Gympass’ greatest challenge might not be its recovery but rather it’s fight for survival that’s still pending.
Wanna hear more? We recommend you listen to the following podcast episode: Las oportunidades se multiplican a medida que se aprovechan. You can find the time stamp available in the description.
Related articles: Tech and startups from Brazil!
-CM
