Why is Jenny Craig weight loss shutting down? Bankruptcy and layoff situation explored 

Jenny Craig Inc., a popular weight loss service provider, is reportedly shutting down some of its weight-loss centers. The company is also warning employees of mass layoffs as it faces uncertainties in the industry from new in-demand prescription drugs like Ozempic and Wegovy.

According to NBC News, the weight loss company has alerted employees about the layoffs as it begins "winding down physical operations, likely transitioning to an e-commerce model." Currently, the weight loss giant, with over 500 weight-loss centers in the United States and Canada, is looking for a potential buyer for its assets.

Jenny Craig may shutter its corporate office on Friday, May 5 (Image via Tim Boyle/Getty Images)

While it has been confirmed that some weight-loss centers will close in the coming days, the company has not hinted at a rough number. There has also been no confirmation on how many employees will be laid off following the upcoming closures. However, the company has warned that it may shutter its corporate office in California and its New Jersey facility as early as Friday, May 5.

Speaking to the press on the matter, a spokesperson for the weight-loss company said:

"Like many other companies, we're currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce-driven model. We will have more details to share in the coming weeks as our plans are solidified."

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Traditional weight-loss businesses like Jenny Craig face tough challenges from new prescription drugs

Like most traditional weight-loss companies, California-based Jenny Craig offers customers structured programs to help them lose weight. The weight-loss program also offers customers nutritionally-balanced menus, including entrees, desserts, and snacks. These programs are designed to help people lose weight in a natural manner, which includes a proper balance between weight-loss exercises and nutritional diets.

As Jenny Craig buckles up for the closure of several weight-loss centers, the company will also be laying off several employees. As per Bloomberg, the company has accumulated roughly $250 million of debt. The company is also considering filing for bankruptcy if all efforts to find a buyer for its assets fail.

The entry of new prescription drugs like Wegovy, Ozempic, and more into the market has brought a great shift in how the weight-loss industry works. Approved by the United States Food and Drug Administration in the last few years, these new drugs can help individuals by stimulating insulin release in the body. This process is known to help lower blood sugar levels and slow down food passage through the gut.

Jenny Craig faces major challenges from prescription drugs like Ozempic and Zegovy (Image via Joe Raedle/Getty Images)

Prescription drugs like Ozempic - approved by the FDA for diabetes in 2017 - and Wegovy - approved for weight loss in 2021 - are some of the major factors that have brought major changes in the weight loss industry. Ozempic recently gained popularity after celebrities started using and promoting it for weight loss.

However, compared to the traditional weight-loss methods available from companies like Jenny Craig, prescription drugs come with major concerns such as high costs and shortages. Such factors often make it harder for people with diabetes and other weight-related issues to obtain them.