Mass layoffs at Visalus, is the business in trouble?
The future of Visalus appears to be on the rocks, following the revelation last Friday that 87 positions will be made redundant in March.
In a letter to the State of Michigan dated January 5th, Visalus wrote
ViSalus, Inc. has decided to substantially reduce its operations at its office located at 340 East Big Beaver Rd., Suite 400, Troy, Michigan 48083. As a consequence, ViSalus expects to eliminate 87 positions in this office on March 5, 2016.
Hardest hit are inbound and outbound affiliate support agents (51 positions), suggesting an overall slump in affiliate activity.
Covering the layoff announcement, the Detroit Free Press reports;
The layoff announcement follows steep declines in sales for Visalus and a series of legal issues, including criminal charges against the company’s director of security in a corporate espionage case.
The company is also battling a federal lawsuit filed by three former ViSalus independent distributors who call ViSalus an illegal pyramid scheme.
The espionage case we’ve already covered, with the pyramid scheme case ongoing.
The lawsuit by the former distributors, who are seeking class-action status, alleges that ViSalus and its executives ran an unlawful pyramid scheme in which the vast majority of distributors lost money and the business depended more on recruitment of distributors than selling products to outside customers.
Among other claims, the suit says ViSalus attracted new recruits at company pep rallies by having all-star distributors go onstage brandishing giant $500,000 or $1-million checks that the plaintiffs claim are misleading.
“It would be surprising if these people actually received the money,” said attorney Andrew Kochanowski, who represents plaintiffs Timothy Kerrigan of Northville, Lori Mikovich of Livonia and Ryan Valli of Canton. Each say they paid $499 for a ViSalus promoter enrollment package.
ViSalus, which did not respond to repeated messages today, has denied the pyramid scheme allegations in court and described the plaintiffs as three disgruntled past promoters among the hundreds of thousands who have sold the company’s goods.
Visalus have claimed in court that their ‘customers far outnumbered its distributors and signified real demand and sales for the shakes and supplements.‘
Whether that’s a legitimate retail customer count or Vemma-style counting of failed affiliates however is unclear.
Our BehindMLM review of Visalus uncovered potential issues with affiliates self-qualifying for commissions via monthly autoship. That in turn lends itself to the majority of affiliates earning commissions on downline autoship orders.
In any event, laying off a bunch of staff amid ongoing declining sales figures doesn’t paint a picture of confidence going forward.
Anyone in Visalus want to add anything further? Otherwise I’m thinking this is probably a decline Visalus isn’t likely to recover from.