What's Happening to Jenny Craig? Transition Phase, Explained

The past year or two have been marked by aggressive layoffs and company closings. Big changes are coming for the weight-loss company Jenny Craig. The program known for its weight-loss centers and meal plans, much like Weight Watchers, has warned of layoffs. Is Jenny Craig going out of business?

Multiple news outlets including CNN have reported on Jenny Craig's beginning a transition from a brick-and-mortar business to a different business model. Does the company plan to shut down operations entirely?

As NBC News reported, Jenny Craig is "winding down physical operations," which means it's shutting down at least some (possibly all) of its physical weight-loss centers. The firm provided "Company Transition FAQs" to the news outlet that explained its recent warnings to employees about upcoming layoffs.

Jenny Craig said it had issued WARN notices to its company locations where over 50 individuals could be impacted. The federal WARN Act requires companies of over 100 employees to give at least 60 days notice before potential layoffs or store closures, and a WARN notice is a top sign that you may be laid off. The company even went so far as to encourage all employees to consider seeking other employment.

Although Jenny Craig, Inc. isn't going out of business right now, it's undergoing major shifts in how the business runs. Shutting down its weight-loss centers will undoubtedly cause issues, and a number of Jenny Craig employees have changed their LinkedIn statuses to "Open to Work."

The company FAQ about the potential layoffs indicated that severance pay for most of those impacted was "highly unlikely," said NBC News.

According to Bloomberg, Jenny Craig is struggling under the weight of $250 million in debt and may consider filing for bankruptcy if it isn't able to find a buyer. For now, the company appears to be focusing on e-commerce rather than in-person business.

Of course, Weight Watchers, now known as WW International, has been a top competitor of Jenny Craig. Other programs that offer similar meal plans and/or counseling include Nutrisystem and Medifast. However, medications like Ozempic and Wegovy have shaken up the diet and weight-loss industry as well.

Jenny Craig, Inc. is a weight-loss company that was founded by the actual Jenny Craig in Australia. It started building centers in the U.S. in 1985, and also expanded into other countries. In 1991, the firm had its IPO that generated $73.5 million in capital. However, the company's growth declined, and it was delisted from the NYSE in 2001.

The company has had several institutional owners over the years. H.I.G. Capital, a global private equity firm, acquired Jenny Craig in 2019. According to NBC News, it had about 500 company-owned franchises in the U.S. and Canada at that time.

Jenny Craig brought in revenue through its recurring memberships, which require members to purchase full meal plans. Prepackaged breakfasts, lunches, dinners, and snacks are included with a Jenny Craig membership. It isn't clear how these plans may change after the physical locations close, but there are still meal plans listed on the website.

There are three main meal plans:

• Simple Meal Plan: seven breakfasts and seven lunches for $13.99 per day
• Essential Meal Plan: seven breakfasts, seven lunches, and seven dinners for $21.99 per day
• Max Up Meal Plan: all meals plus snacks, desserts, and Recharge bars and personal coaching for $28.99 per day (discounted for the first five weeks)