Jenny Craig is closing its doors after four decades in the weight loss and nutrition business, according to internal employee communications reviewed by NBC News.
In an email sent to employees late Tuesday, the company said it was closing “due to its inability to secure additional funding.” The last working day for corporate and Jenny Craig field staff will be Friday, and the last working day for hourly center staff will be Tuesday. The company operated about 500 company-owned and licensed stores in the United States and Canada, according to HIG Capital when it acquired Jenny Craig for an undisclosed amount in April 2019. It now employs more than 1,000 people.
Last week, corporate employees at the company’s Carlsbad, Calif., office received a WARN notice that the company would close the office on June 24, but could close as soon as Friday. Q&A was also sent out by Jenny Craig to staff, explaining that it is possible to end physical operations to transition to an e-commerce model.
For the past two weeks, Jenny Craig has been out of money while looking for a buyer. Bloomberg Law reported last month that the company is pursuing the sale. Two of Jenny Craig’s current employees say they fear the company will file for bankruptcy by the end of the week.
Neither Jenny Craig nor HIG Capital, a $55 billion private equity firm, responded to requests for comment.
Founded by Jenny Craig in 1983 to help people lose weight, the brand has become a household name for weight loss software. The program offered special menus designed by chefs and nutritionists to help consumers lose weight. The company has recruited celebrities to front the brand, including actors Kirstie Alley, Valerie Bertinelli, and Jason Alexander, and singer-songwriter Mariah Carey.
The company has faced increased competition recently after a group of drugs that can help people lose weight, such as Wegovy, Rybelsus, and Ozempic, hit the market promising to help consumers shed pounds. The core of Jenny Craig’s customer-facing operations has mostly occurred in its physical centers, according to employees, but consumers in general have been moving more toward online services in recent years.
Last week after the potential layoffs were reported, a spokesperson for Jenny Craig told NBC News that the company is “embarking on the next phase of our business to evolve with the changing landscape of today’s consumers. Like many other companies, we are currently transitioning from traditional retail to A customer-friendly model based on e-commerce. We’ll have more details to share in the coming weeks as our plans solidify.”
There is no indication in the most recent employee communication that the transition to an e-commerce model will continue.
Jenny Craig employees say there was no indication until the past two weeks that the company was going uphill. A month ago, the company was posting job openings on LinkedIn, and one employee says she received a raise and new training just a few weeks ago.
Jenny Craig’s policy is to offer severance pay to laid-off employees “based on job level and length of service with the company,” according to an FAQ document it sent out last week.
“However, at this time, it is unlikely that this money will be paid,” she said.
The company told employees in its termination letter that they would receive their “final paycheck, including the full compensation you earned for the last working day and all accumulated and unused vacation time paid.”