SALT LAKE CITY — Utah based 24 Hour Fitness employees received a big surprise Wednesday, after the gym chain used a pre-recorded conference call to give employees nationwide the boot – turning the chain’s temporary closures into permanent layoffs.
“Starting, that’s the hardest part,” Dave Merrel said as he tossed up a pair of 55-pound dumbells. “You put a lot of your heart and soul into it.”
For Dave, the gym is a sanctuary.
“I always tell people that personal training is basically the cheapest counselling you’re going to get,” Dave laughed as he hustled around Butler Pro Gym in West Valley City, a locally owned bodybuilding shop decked out with fitness equipment and paintings of some of the fitness greats.
Dave is a new trainer at Butler – it’s actually his first day securing space to train at the facility. Until just yesterday, he shared his passion for health with his clients at 24 Hour Fitness, where he has worked for years.
“We used to joke that our competition, it’s not Planet Fitness, it’s not VASA, it’s the couch,” he laughed some more.
On March 16, in the wake of the pandemic, all 24 Hour Fitness locations shut down and pieces of paper went up across the doors of their four Utah locations, letting members and employees know the closures were temporary.
On April 1, the company sent out a notice to members acknowledging prolonged closures due to COVID-19, and a plan to suspend all membership billings.
In the notice, the company told members how to cancel their memberships, should they want to do so. But thousands of members were left frustrated after being unable to do so – prompting the creation of a Twitter group providing additional resources and instructions to cancel.
On June 10, employees we spoke with said they were shocked when they were asked to join a conference call, during which they would be compensated for one hour of work.
“This was not an easy decision and not one that we take lightly,” a pre-recorded voice can be heard saying in a video taken by fellow employee, Eli Girgis, during the conference call with 24 Hour Fitness.
“Today will be your last day of employment with 24 Hour Fitness,” the voice continued.
The call went out to hundreds of employees across the country. Dave estimates more than a hundred were located in the Beehive State.
“We were all kind of a little bit shell shocked obviously,” said Dave. “You’re looking at, at least 200 employees just ‘pop!’ gone! Left out in the market with nothing for them.”
Dave said Eli’s recording missed one important detail.
“The call said, ‘if you are on this call, then you are part of the clubs we are closing so that the business can survive,” Dave recalled one of the opening lines of the recording.
Employees were then sent an email confirming their now non-existent employment status and gave direction as to what they could expect next.
“I am telling my clients [the location is closing], my clients are just absolutely floored that they weren’t told also, which spreads out into the members and the members are finding out now,” said Dave.
“They’ve given us no information to tell anyone as far as like, here’s how you’re going to get refunds for your unused training sessions, here’s how you’re going to get refunds from your membership dues,” he continued. “They’ve done a really poor job of even communicating with their members let alone former employees.”
In a statement (below), 24 Hour Fitness confirmed they were re-evaluating staffing needs and the company’s overall footprint in order to create a sustainable, long-term business.
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.
“These are painful decisions and we do not make them lightly,” said Tony Ueber, CEO, 24 Hour Fitness. We thank our dedicated, passionate team members for their contributions and impact they have had on helping to change lives every day through fitness.”
However, after already having to transfer following a recent closure of a different Utah location, Dave said he’s not surprised more are on the chopping block.
“Utah’s kind of an isolated market, they’ve been slowly contracting here anyway, so we had a pretty good idea that Utah was going to be one of the ones that they kind of lanced,” Dave said. “They knew they had to do this, they knew they had to pull the plug.”
According to the Wall Street Journal, the chain is reportedly preparing to file for bankruptcy and began struggling financially long before the pandemic started.
The Better Business Bureau also has a current alert for the San Ramon, California based business.
According to BBB, in November of 2017, 24 Hour Fitness entered into a Settlement Agreement with the Orange County and Contra Costa District Attorney’s Office following allegations that the business “was misleading and used unfair practices relating to the company’s sale of prepaid membership contracts.”
The company agreed to refund all members that return the claim form, agreed to pay a total of $1.2-million in civil penalties, and pay $100,000 in costs to the Orange and Contra Costa Counties.
FOX 13 asked 24 Hour Fitness to confirm whether or not Utah locations were in fact closing, we also asked how many Utah employees were laid off – the company responded with the aforementioned statement and nothing more.
“A lot of [former employees] out there are going to be hurting, as the unemployment benefits stop with the CARES [Act], these trainers are left high and dry,” Dave said. “With gyms the way they are, they’re not going to be able to find work.”
Dave said he’s fortunate to have found a new space and community so quickly with Butler Pro Gym, where the local owners are actively working to fundraise for trainers in extenuating circumstance who are now also facing unemployment.
Still, his biggest concern is for his clients and their fitness journey.
“A lot of [my clients] are finally getting that empowerment in themselves,” Dave said. “Obviously, yeah it sucks for my employees, but the clients are just barely getting their footing, they’re barely starting to believe in themselves, they’re barely starting to see change and now it’s all gone… you know, it’s going to be really hard for these people to start again.”
Despite the onset of uncertainty, Dave is still smiling and continuing to share his mantra.
“You’re stronger physically, mentally, emotionally, than you give yourself credit for, lean into that,” said Dave. “You are stronger than you think, now is the time you’ve got to lean into that.”