Late last month, the indoor cycling company SoulCycle quietly made the decision to institute layoffs across the company—a result of the devastating effects of the coronavirus pandemic, which had forced the company to close its studios in the U.S., Canada, and the UK in March.
Exactly how many employees were let go is unclear. A source close to the company said 5 percent of the company was laid off, although SoulCycle told one of the departing employees the actual figure was more than 10 percent, according to audio of a meeting reviewed by VICE. SoulCycle did not respond on the record to a request for clarification. (Vox's The Goods first reported news of the layoffs.)
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But as affected employees learned that they would be departing the company, they also discovered something else: Many of them would be offered no severance pay at all, regardless of how long they had been with SoulCycle—a situation that left employees feeling “frustrated and blindsided,” said a long-time employee who was laid off. (VICE reviewed a copy of a separation agreement that did not include mention of severance.)
“I’m angry,” the now-former employee said. “I’m very angry and I’m very sad.”
Employees who spoke to VICE said that it was no surprise that the company had decided to lay off some employees during an international economic crisis. One month earlier, the company had already instituted 25 percent pay cuts for some employees and furloughed others in an attempt to stave off the pandemic’s effects.
But the lack of any severance took many of the outgoing employees aback. SoulCycle is part of the Equinox Group, a luxury fitness company owned in part by billionaire real estate tycoon Stephen Ross, who faced controversy last August, when it was revealed that he planned to host a Hamptons fundraiser for President Trump. In the middle of the decade, the company became so successful that it considered going public.
Some of the people the company let go had been with SoulCycle for more than five years, according to multiple sources. “I was anticipating the lay off, but was not expecting to receive $0 severance,” said one such laid-off SoulCycle employee.
Explaining the lack of financial compensation, SoulCycle’s leadership team told at least one laid-off employee that the company was aligning the cycling company’s layoff policies with Equinox’s, which is to only award severance to employees with the title of director or above, according to audio of the meeting obtained by VICE.
But employees themselves said that was not the case, and that the company offered severance to employees who were not directors in ways that seemed arbitrary and confounded them. One West Coast studio manager said she was told her job was safe assuming she accepted a 25 percent pay cut, only to be let go days later. She wasn’t offered severance and assumed no one else was either.
“And then I found out later that day that every single person got severance that got let go that day except for me and another studio manager,” she said.
SoulCycle did not respond on the record to repeated requests for clarification about who received severance. One laid-off employee who had been there for more than a year called the lack of transparency “really messed up.”
“I’m not sure at all how they made their selections about who got severance,” the laid-off staffer said. “The inconsistency to me is the part that is most infuriating.”
Some employees who did not receive the severance got an offer of a different sort: their choice of three months of continued health care insurance, or $1,500, according to the separation agreement obtained by VICE and the audio recording.
The cycling company had begun to struggle even before the pandemic as it faced competition from the likes of Peloton, which offers customers the opportunity to purchase a stationary bike and take classes from inside their home, rather than SoulCycle’s more than $30 for an in-person class.
In an attempt to keep up, SoulCycle created its own at-home bike, but only put it up for pre-order in mid-March, by which time the pandemic was well underway. A few months earlier, former CEO Melanie Whelan resigned from her position.
“The road ahead looks very grim at least for now,” said one of the laid-off employees. “So in that sense, it was almost a relief to cut the cord.”