Life Time Inc., which is known for its high-end fitness facilities, plans to permanently lay off about 300 of its Twin Cities employees, most of whom work at its Chanhassen headquarters. The company said it needs to adjust because of the hit the company took as it was forced to close for the spring in many locations due to coronavirus restrictions.
About 50 employees will be cut from Life Time’s Chaska millwork facilities and about 250 corporate employees will be laid off from its main campus in mid-August, company officials disclosed to the Minnesota Department of Employment and Economic Development.
Life Time fitness clubs across the country closed in March as state mandates forced gyms to shut down in an effort to prevent the spread of COVID-19.
“When we closed, we hoped the clubs would reopen quickly,” said Lisa Pollock, senior vice president of human resources for Life Time, in a letter to DEED required under the Worker Adjustment and Retraining Notification Act.
About two-thirds of Life Time’s fitness facilities were closed nearly three months, with uncertainty surrounding the remaining one-third, she said.
“The tremendous financial impact created by the extended shutdown, combined with operational expense obligations that continued through this time, no clear line of sight as to when member traffic levels will return to normal, and the need to halt nearly four years of in-progress new club development activity, has resulted in an unforeseen, significant impact to the business,” Pollock wrote.
Life Time has about 1,600 corporate employees at its Chanhassen campus. Its millwork team builds the fitness company’s lockers and cabinetry for both new clubs and refurbishings of older locations.
The layoffs won’t affect the millwork team’s entire staff, Natalie Bushaw, a Life Time spokeswoman, said on Wednesday.
Life Time has about 150 clubs and no plans to close any of them, Bushaw said. In all, the layoffs represent a 1% reduction in the company’s total workforce, she said.
Still, she called Wednesday “a difficult day.”
Just last week, Life Time founder and Chief Executive Bahram Akradi showcased the newly reopened Southdale Center facility in Edina to state officials, including DEED Commissioner Steve Grove.
“Sectors like ours got hurt the most,” Akradi said last week. “We were shut down the longest. … Despite the losses we had to take, I am not shaken.”
At the end of last year, the company had projected nearly $2 billion in revenue for 2019.