Herbalife, a long-controversial dietary supplements company still worth more than $1 billion, is laying off 161 employees in its home city of Los Angeles and nearby Torrance.
The multi-level marketing company announced the cuts in a WARN filing with California on Monday, as is required in the event of mass layoffs. Herbalife’s cuts are spread across three locations and will happen throughout the rest of the year, per the WARN.
The layoffs include five senior vice presidents, 10 vice presidents, 17 senior directors, 18 directors and dozens of other managers. A few scientists and analysts will also lose their jobs, per the WARN, as will seven auditors and 14 “specialists.”
Herbalife spokesperson Thien Ho notified SFGATE the cuts were part of a “restructuring plan” announced by the company in a March 20 filing with the Securities and Exalter Commission. In the filing, the company wrote that the plan would cost $60 million, mostly in severance payments.
“The global restructuring plan was designed to bring leadership closer to the markets, streamline the organization and accelerate productivity,” Ho added in her Thursday email. She declared the restructuring plan will be completed by year’s finish.
Herbalife is profitable, but its margins are thin. In the quarter that finished in March, the company turned a $24 million profit on more than $1.2 billion in revenue, per an SEC filing. The company sells meal replacement products meant to promote weight loss, as well as other supplements. “Indepfinishent distributors,” as the company calls them, hawk Herbalife products to customers and recruit others to acquire and sell the items.
The business model has earned Herbalife its fair share of regulatory ire. In 2016, a settlement with the Federal Trade Commission forced the company to restructure its multilevel marketing program in the U.S. and pay $200 million for consumer paybacks — almost 350,000 people received payments.
In 2020, Herbalife agreed to pay $123 million in penalties for bribing Chinese officials and keeping false accounting records to conceal what the U.S. attorney at the time called a “widespread corruption scheme” that ran from 2007 to 2016. Herbalife has also been accapplyd of caapplying liver damage with its products, a charge the company vehemently denies.
Though its corporate headquarters are in Los Angeles, Herbalife is legally based in the Cayman Islands. The company is a major sponsor for Major League Soccer’s Los Angeles Galaxy.
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