SoulCycle Announces Staff Furloughs, 25 Pct Pay Cuts

SoulCycle employees are probably working up a sweat as the New York-based fitness company trimmed jobs and initiated a 25 percent pay cut in response to its studio closures due to the coronavirus pandemic.

In an internal email to staffers leaked to The Verge this week, SoulCycle said in addition to the pay cuts, it will also furlough select employees without pay over the next 30 days. This will allow them to apply for unemployment benefits as the global company’s 88 studios downsize.

“In an effort to protect our teams in the wake of COVID-19 pandemic yet remain in the strongest position to reopen our studios globally, SoulCycle has had to make a number of difficult decisions that impact individual roles and payroll at all levels of the organization, including implementing pay reductions and furloughs for employees unable to work due to studio closures,” a SoulCycle spokesperson told The Verge.

Founded in 2006, the company has studios in the U.S., Canada and the United Kingdom.

SoulCycle did not specify how many furloughed employees would be impacted. But the workers include receptionists and cleaning crews, The Verge report said.

“Our people, who bring this brand to life every day for our riders and our communities, are at the core of everything we do,” the spokesman told the website. “Through these actions, we are able to continue to compensate the majority of our workforce with as minimal a reduction in pay as possible, while continuing to provide health benefits and access to mental health services to all employees enrolled.”

This is not the first time SoulCycle has faced challenges.

Their planned initial public offering in 2015 was withdrawn in 2018 because of what the company said was unfavorable market conditions.

“When SoulCycle initially filed for an IPO in 2015, the company said it hoped to raise at least $100 million, a placeholder figure, to pay off debt and open studios,” CNBC reported at the time.

SoulCycle launched an at-home bike that could compete with rival Peloton after teasing the product last summer, according to reports.

The fitness company’s product resembles Peloton’s, with on-demand cycling classes that can be streamed through a monthly contract with the Variis platform. Features of the bike will include an HD screen, 4GB of RAM, a G-sensor and NFC support.

SoulCycle’s version of the product will cost around $2,500, which comes with a five-pack of live classes. There is no extra charge for shipping and installation, although customers will have to pay $250 to remove the bike if they decide to return it after the 30-day trial.

SoulCycle started taking preorders for the bike on March 9 and was expected to ship in select cities over the following weeks.