[Updates: On June 15, 2020, 24 Hour Fitness filed for Chapter 11 reorganization. The story has been updated to include additional details revealed in the Chapter 11 filing, most notably the number of clubs permanently closed is now 134 and the number of employees permanently laid off has been revealed. To find out more about the restructuring, read this story.]
24 Hour Fitness, San Ramon, California, permanently closed 100 clubs on June 11, according to a notification on its website. The company laid off 8,300 employees from those clubs on June 10.
The clubs closed were in the following areas:
- Bay Area in California (10)
- Los Angeles (11)
- Orange County in California (7)
- Sacramento, California (1)
- San Diego (4)
- New York/Washington, DC (10)
- Portland, Oregon (2)
- Seattle (7)
- Austin, Texas (3)
- Dallas (10)
- Houston (11)
- Miami (2)
- Orlando (1)
- Colorado (12)
- Las Vegas (8)
- Reno, Nevada (1)
This list of closed clubs may not be final, a source within 24 Hour Fitness told Club Industry.
Despite one report that the layoffs were done with a pre-recorded call, the source told Club Industry that the layoffs were conducted in group and one-on-one calls because of the COVID-19 stay-at-home orders that prevented face-to-face communication. The calls were conducted by leaders who supervised the specific employees that were laid off, and the calls were not prerecorded.
“We thoughtfully planned these interactions to the best of our ability given COVID-19, and the fact that it has been reported otherwise indicates poor story research,” the source said.
24 Hour provided the following statement about the developments:
“The COVID-19 pandemic has accelerated the 24 Hour Fitness strategy to transform our business. And, the pace by which we have had to make difficult decisions has been accelerated as well. In order to meet the changing needs of our club members, we are re-evaluating staffing needs and the overall company’s club footprint. This includes a focused set of employee reductions to align with current and future needs of the business. The goal is to reposition 24 Hour Fitness to create a sustainable, long-term business for our team members and the millions of club members that we serve.
“At the same time, we will continue with a phased club reopening process as we are operationally prepared and state and local governments and public health agencies indicate it is safe to do so.”
Prior to the club closings and the layoffs, 24 Hour had 445 clubs in 14 states and 19,200 employees. During the temporary club closures, the company furloughed approximately 17,800 people and reduced their workforce by approximately 700 individuals.
“These are painful decisions and we do not make them lightly,” Tony Ueber, CEO, 24 Hour Fitness, said in a statement given to Club Industry by the company. “We thank our dedicated, passionate team members for their contributions and impact they have had on helping to change lives every day through fitness.”
On May 31, 24 Hour Fitness reopened some clubs in Florida, Texas and Hawaii with certain temporary operational changes in accordance with local and state guidelines.
On June 9, 24 Hour Fitness said it expects about 50 percent of its clubs to be reopened in June with the remaining clubs to open in late July and early August.
The company lists on its website the planned reopening dates for its remaining clubs that are temporarily closed.
24 Hour has been struggling financially since prior to the COVID-19 pandemic, but the financial situation worsened when the company had to temporarily close all of its clubs on March 16 in accordance with local and state orders to help curb the spread of COVID-19.
Media reports from Bloomberg and the Wall Street Journal have noted that the company is looking for remedies to its situation, including a possible Chapter 11 filing. In late May, the Wall Street Journal reported that the company was talking with landlords about closing some clubs as part of the reorganization and was seeking a bankruptcy loan of $200 million.