Nu Skin ‘reallocating capabilities’ after earnings dip; employees report layoffs
First it was downsizing, then rightsizing. Now, the business lingo used for personnel adjustments — i.e., layoffs — appears to be “reallocating capabilities.”
That is what leaders at Nu Skin, the Provo-based multilevel marketing company specializing in health and beauty products, say they are doing after a soft showing in its most recent financial statement.
On Monday, rumors were rampant the company was preparing to lay off an unknown percentage of the company both locally and globally. That day, the Daily Herald received an email from an anonymous employee saying there were big layoffs coming.
Nu Skin was hesitant to release any information and denied speculation that about 200 employees might be affected.
“It didn’t happen to me. I’m OK, but I’m losing many of my friends,” another employee anonymously told the Daily Herald.
A number of employees have also taken to social media platforms like LinkedIn throughout the week to say they had been laid off.
By Friday, after the release of a discouraging earnings report and amid global downturns, there was still no official word from Nu Skin on how employees would be affected.
In a press statement following a meeting Thursday releasing second quarter financials, Nu Skin said year-over-year revenue collections in the second quarter of 2022 totaled $560.6 million, compared to $704.1 million last year.
While certain areas worldwide remained steady or growing, the overall picture shows a softened market now and into the third quarter.
“Because of this and global uncertainties, Nu Skin is reallocating capabilities,” according to a press release on the company’s website.
While Nu Skin prepares for whatever personnel adjustments might be made, it is pointing to the COVID-19 pandemic in China, the war in the Ukraine and the general economic downturn globally as three of the biggest factors for the decrease in earnings.
“As previously announced, our second quarter results were impacted by extended COVID-related factors in Mainland China, distractions in (Europe, the Middle East and Africa) related to the ongoing conflict, weaker global economic conditions impacting emerging markets and the record strength of the U.S. dollar,” Nu Skin President and CEO Ryan Napierski said in a statement. “Despite these challenges, we delivered our ninth consecutive quarter of growth in the U.S. on the strength of new product launches and our social commerce model.”
“Given the current landscape, we are taking aggressive measures to re-align our capabilities and resources with a focus on delivering Nu Vision 2025, which will result in a restructuring event in the second half and reduced operating expenses going forward,” Napierski added.
“In light of the heightened global uncertainties and their impact on our business, we are adjusting our annual guidance,” said Mark Lawrence, chief financial officer. “Our 2022 revenue guidance is now expected to be $2.33 (billion) to $2.41 billion, with an approximate 5% foreign currency headwind.”
He claimed that with several anticipated adjustments, these actions will benefit the balance of 2022 and provide approximately $100 million in cost savings in 2023.
Along with Thursday’s extensive report, Nu Skin Enterprise also announced its board of directors has declared a quarterly cash dividend of $0.385 per share, which will be paid to shareholders on Sept. 7.