Weight loss company Jenny Craig to shut down corporate offices

Monday, May 1, 2023
Jenny Craig to shut down corporate offices
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Weight loss company Jenny Craig is planning on closing its corporate offices.

Weight loss giant Jenny Craig may shutter its corporate offices as early as Friday as part of a likely transition to an e-commerce company, ABC News has learned.

In WARN Act letters sent by the company to employees and obtained by ABC News, Jenny Craig notified employees that it plans to close its Carlsbad, California, company site, which houses its corporate offices, and "end the bulk of operations" at the facility on or about June 24, but wrote that if it can't secure financing to continue its operation then the facility may close as early as May 5.

In another WARN Act letter obtained by ABC News, the company said it intends to close its New Jersey facility on or about July 24, but possibly as early as May 5.

The Worker Adjustment and Retraining Notification (WARN) Act mandates that large businesses give employees notice before plant closings or mass layoffs.

In an FAQ sent to employees on Tuesday and obtained by ABC News, Jenny Craig said it is beginning "the process of winding down physical operations, likely transitioning to an e-commerce model."

"We do not know the exact employees/groups whom will be impacted, and if any employees may be retained," the FAQ tells employees. "As a result, we would suggest that you anticipate that your employment may be impacted and begin to seek other employment."

The company has approximately 600 centers globally, with nearly 500 company-owned and franchised locations in the U.S. and Canada, Jenny Craig said in a press release earlier this year.

The FAQ sent company wide included links to unemployment resources for 39 states and Canada.

A spokesperson for Jenny Craig did not immediately respond to a request for comment.

Companies, mostly in tech and media, have laid off thousands of employees, so far this year.

Amazon announced in early January that it's eliminating 18,000 roles in total, including layoffs that were announced in November 2022. The company announced last month that it was laying off an additional 9,000 people.

Payments company PayPal is cutting 7% of its staff, which amounts to about 2,000 employees, President and CEO Dan Schulman said on Jan. 31.

E-commerce company eBay announced in an SEC filing on Feb. 7 that it's laying off 500 people, or 4% of its workforce.

Jenny Craig is saddled with $250 million in debt and has been looking for a buyer, Bloomberg Law reported in March.

The weight loss industry is going through changes, as the obesity drug business has exploded in popularity.

The U.S. Food and Drug Administration has approved Ozempic, also known as semaglutide, as a treatment for Type 2 diabetes alongside diet and exercise if other medications cannot control blood sugar levels well enough.

Although Ozempic is not explicitly approved for chronic weight management, it can be prescribed off-label and used safely for people who are obese.

WW, formerly known as Weight Watchers, announced last month that it acquired Sequence, a subscription-based telehealth platform that provides telemedicine appointments with doctors who can prescribe Ozempic and Wegovy, a similar drug but given at a higher dosage.

The medications, which mimic hormones found in the body to support weight loss, have recently grown in popularity thanks to reported use by celebrities and posts from everyday people on social media about successful weight loss.

ABC News' Katie Kindelan, Dr. Avish Jain, Kiara Alfonseca, Max Zahn contributed to this report.