China’s largest fitness platform, Keep, is going through tough times. The company has decided to cut over 100 jobs, representing 15% of its workforce. This decision comes as people are spending less on non-essential items in the world’s second-largest economy. The slowdown in consumer spending has had a direct impact on the fitness platform’s business.
Major Layoffs at Keep
The layoffs, which started last week, are affecting different departments at Keep. These include the online, international, and marketing teams. Keep had about 920 full-time staff members as of June 2024. Employees who are impacted by this decision will leave the company by November 29. This restructuring is part of Keep’s cost-cutting efforts to cope with the tough economic climate.
In addition to layoffs, Keep has also made smaller cuts, such as no longer providing free tissue paper to its staff. While this might seem like a minor change, it reflects the company’s efforts to reduce unnecessary expenses.
Keep’s Struggles Reflect China’s Economic Woes
The fitness platform’s challenges highlight the broader issues in China’s economy. The country’s growth in the July to September period was the slowest since mid-2023. However, experts believe that China’s stimulus plan might help improve the situation in the coming months.
As more people tightened their budgets, Keep scaled back its offline gym business, Keepland. In March, the company shut down nine Keepland locations in Guangzhou. By October, all Keepland gyms in Beijing and Shanghai were also closed. The company announced that the Keepland mini-program, which lets users book classes and leave reviews, will stop operating next year due to business adjustments.
Financial Losses and User Decline
Keep’s financial health has taken a hit. The company posted a 163 million yuan (about $22 million) loss in the first half of 2024. This is a huge drop from the 1.2 billion yuan profit it made the year before. Monthly active users on the fitness platform have also declined significantly. In the first six months of 2024, Keep had 29.7 million users, which is only a slight increase from last year but a big drop from 37.7 million in 2022.
| Year | Monthly Active Users (Millions) |
|---|---|
| First Half of 2022 | 37.7 |
| First Half of 2024 | 29.7 |
Despite this, Keep said in its financial report that it continues to focus on improving operational efficiency and carefully managing its costs.
New Revenue Opportunities
To offset its losses, Keep has started exploring new ways to earn money. In October, the company opened a new store in Shanghai. The store sells fitness clothing, outdoor gear, and workout equipment, showing that Keep is trying to diversify its revenue streams.
Conclusion
Keep, China’s biggest fitness platform, is facing serious challenges. With a struggling economy and fewer users, the company has been forced to cut jobs and shut down its offline gym business. However, by opening new stores and focusing on cost management, Keep is hoping to find a way forward. Whether these efforts will be enough remains to be seen, but the company’s ability to adapt will be key to its future success.
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