Jenny Craig closing locations, eying e-commerce as bankruptcy looms

Weight loss company Jenny Craig is closing hundreds of locations across North America this week, including its corporate offices, as it shifts to an online model amid struggles to survive.

What’s happening: NBC News initially reported that Jenny Craig sent notice to all staff that it is “winding down physical operations.”

• The company said there was a potential for mass layoffs in Canada and the United States, and that the changes will “likely impact all employees in some manner.”
• Many of its 500-plus physical locations will be shuttered as it transitions to an e-commerce model, with staff moving to a work-from-home concept.
• Jenny Craig will close its San Diego and New Jersey headquarters as well, possible within a matter of days.
• “Like many other companies, we’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce driven model,” said CEO and President Mandy Dowson in an interview with Bloomberg.

Further explanation: The announcement comes as the weight loss company struggles with $250 million of debt.

• It is trying to re-work its debt with lenders and is looking for a buyer.
• Jenny Craig may file for bankruptcy in Canada and the U.S. if its efforts to find a buyer fail.
• The weight loss industry has taken a hit following the surge in popularity of weight loss drugs, such as Ozempic.

Impact on Canadian staff

Jenny Craig has not shared the extent of the impact that layoffs and closures will have on its Canadian staff.

Samfiru Tumarkin LLP has been contacted by Jenny Craig employees who received an email on May 1 from the employer, informing them that all centres in Canada have been closed and that layoffs are commencing.

Termination packages for Jenny Craig staff

In Canada, non-unionized employees at Jenny Craig are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

Severance can be as much as 24 months’ pay, depending on a number of factors.

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• Severance for technology industry employees
• Severance for provincially regulated employees
• Severance packages in mass layoffs

WATCH: Employment lawyer Lior Samfiru explains what rights employees have if they are being fired or let go on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper severance if it falls short of what you are actually owed.

If you don’t receive the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.

Employers sometimes use pressure tactics to try to coerce employees into accepting poor severance packages, such as imposing a deadline for accepting the offer.

However, in Canada, terminated employees have up to two years from the date of their dismissal to pursue a claim for full severance pay.