Jenny Craig is reportedly shutting down some of its weight-loss centers and warning employees of mass layoffs amid upheaval in the industry from popular new prescription drugs like Ozempic.
Jenny Craig alerted employees to potential layoffs as it begins “winding down physical operations” and hunts for a buyer, according to NBC News. Jenny Craig has nearly 500 weight-loss centers in the United States and Canada.
The company, founded in 1983, did not disclose to CNN how many weight loss centers will close or how many employees will be impacted.
“Like many other companies, we’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce driven model. We will have more details to share in the coming weeks as our plans are solidified,” a spokesperson for Jenny Craig said in a statement to CNN.
Jenny Craig’s program provides nutritionally balanced menus, which include entrees, desserts and snacks, designed to help people lose weight. Bloomberg reported this week that the company has roughly $250 million of debt and is considering a bankruptcy filing if efforts to find a buyer for its assets fail.
It’s the latest sign of major changes in the weight-loss industry, brought on by popular new prescription diabetes drugs such as Wegovy, Ozempic, and Rybelsus.
These relatively new drugs work by stimulating the release of insulin, which helps lower blood sugar. They also slow the passage of food through the gut.
The FDA approved Ozempic for the management of diabetes in 2017 and Wegovy for weight loss in 2021.
Traditional weight-loss companies are scrambling to adjust. WeightWatchers is also getting into the prescription weight-loss drug business.
The company, now known as WW International, recently bought Sequence, a telehealth subscription service that connects patients with doctors who can prescribe weight-loss and diabetes drugs.
The $106 million acquisition of Sequence will give WW a foothold into the growing market for prescription drugs to manage weight loss.
Ozempic has gained popularity in part due to celebrities using it for weight loss.
But there are many concerns with using diabetes drugs for weight loss, including high costs and shortages that are making it harder for people with diabetes to obtain the drugs.