‘A tough day at Mindbody.’ Coronavirus forces company to lay off, furlough 700 workers
Thursday was, to say the least, a “tough day” at Mindbody.
Early Thursday morning, hundreds of the San Luis Obispo-based tech company’s workers around the world were notified via email that they had been laid off — or in some cases, furloughed — in an attempt to keep the business going in a time of coronavirus-induced crisis.
“It’s a tough day, a really tough day,” Mindbody CEO Rick Stollmeyer told The Tribune via Zoom on Thursday afternoon, just hours after the workers were notified. “If you’d asked me a month and a half ago, is there anything that could possibly happen that could shut down all 60,000 of our customers at once, I would have said ‘No, that’s impossible.’ But that is exactly what is going on right now.”
In early March, as coronavirus began spreading into the United States and other areas where Mindbody has offices, the health and wellness company saw some impacts to business, but the company intended to weather them out.
By mid-March, when many jurisdictions around the United States had begun issuing shelter-at-home orders that shuttered face-to-face businesses such as gyms and fitness studios — Mindbody’s bread and butter — the reality of the situation hit.
“Really toward the middle of the month all the activity on our platform really just fell of the cliff,” Stollmeyer said. “Close to 95% of our customers are fully shut down right now.”
Since then, company executives have been attempting to plan for an uncertain future — and determine how they would keep the lights on when almost all of Mindbody’s revenue has dried up.
“If we didn’t take prompt action, we would burn through our cash reserves in a matter of months, and that’s just unacceptable,” Stollmeyer said. “We need to protect the business for the long term.”
So Mindbody identified 700 of its 2,000 workers worldwide who it could either lay off or put on three-to-four-month furloughs as it attempts to protect its core business.
Stollmeyer said the deepest cuts were in the sales and marketing department, as well as in customer service.
“The list of people furloughed, it includes Mindbody veterans, people that have been with us 10 years, eight years,” he added. “It’s gut-wrenching on a personal level, on a professional level, on every level.”
“Make no mistake, it’s a tough day at Mindbody,” he said.
San Luis Obispo, Santa Maria workers impacted by layoffs
At the company’s two local offices in San Luis Obispo and Santa Maria, roughly 300 employees were laid off or furloughed, Stollmeyer said.
Furloughed workers were told the company intended to hire them back within 90 to 120 days. During that time they continue to receive their normal health benefits.
The laid-off workers are fully off of work, and they’ve been encouraged to take advantage of the government’s newest resources for workers impacted by COVID-19. Stollmeyer is also urging any local tech companies that are hiring in the midst of the coronavirus crisis to consider taking in these Mindbody team members.
“There’s a lot of really good people that are available right now and I know there are companies that are hiring, particularly companies that work around technology,” he said. “We’d love to see as many of our team members find other employment as soon as possible.”
A San Luis Obispo Mindbody employee who spoke to The Tribune on the condition of anonymity said she was notified Thursday morning via email that she had been laid off.
“I cried. A lot,” she wrote in an email to The Tribune. “I felt like the rug was pulled out from under me.”
The employee, who worked in customer service, said she and coworkers had been asked recently if they could afford to reduce hours or take furlough days, so she was shocked Thursday when the layoff mandate came down rather than for the company to first ask for voluntary leave hours or other cuts.
“My ex-coworkers and I are referring to it as the Thanos snap,” she wrote, referring to the Marvel movie supervillian who literally snaps half the universe’s population out of existence in “Avengers: Infinity War.” “Trying to make a joke in a weird time.”
The employee said she plans to apply for unemployment, and that the company provided her with two weeks’ severance pay, plus one week for every year she had worked for Mindbody.
“I hope everyone else will be OK right now,” she wrote. “Not just those who lost their jobs but those who have to do twice as much work to fill gaps for those who are gone. This is a terrible situation from everyone involved.”
What happens next at Mindbody?
Many of the remaining Mindbody workers have had their hours or pay cut to help improve the company’s financial situation, Stollmeyer said.
Stollmeyer himself won’t be accepting a paycheck for the rest of the year, he noted, and other executives have also taken pay cuts.
As for the employees who remain at work, and even those furloughed, their positions aren’t exactly secure.
“I recorded a video for the team,” Stollmeyer said. “I just said, ‘I’d love to guarantee that your jobs are safe, but I can’t. But we currently have no additional plans for cuts.’ “
“We furloughed people that we have a strong belief that we could bring back in 90 to 120 days,” he added. “But again, no guarantees. It is possible that those folks could get moved to the laid-off category later; we’re going to do everything in our power to prevent that.”
Over the coming months, the company will focus on providing technology that will help its users pivot to virtual offerings useful throughout the coronavirus pandemic.
“We think we have a unique ability to deliver that,” Stollmeyer said. “We think that the businesses that survive this storm and come out the other end will be the ones that are really smart about that virtual meets face-to-face strategy.”
The company will also continue to operate its offices on the Central Coast. After the layoffs, the company still employs 800 workers at its San Luis Obispo headquarters and Santa Maria satellite campus.
“We remain utterly committed to the Central Coast,” Stollmeyer said.
This story was originally published April 2, 2020 at 6:05 PM.
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