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Lehi-based XanGo cuts 10% of workers: Recession ? About 50 employees were let go from the nutritional-supplement company.
(Salt Lake Tribune, The Via Acquire Media NewsEdge) Mar. 13--XanGo, the high-flying, Utah-based direct marketer of a nutritional juice, has laid off about 50 employees, a little less than 10 percent of its work force.
The Lehi company said Friday that global economic conditions led it to re-evaluate its operations.
"We are reallocating resources to position ourselves for the future, recognizing the reality of the economy," said Bob Freeze, vice president of public relations.
XanGo, the sponsor of the professional soccer team Real Salt Lake, whose player jerseys display the company's name, has been one of the stars of Utah's large nutritional supplement industry, many of which, like XanGo, are multilevel marketers. Under that business plan, independent distributors recruit others into the company for whom they receive sales commissions, and so on.
Freeze said the company turned a profit in 2008 even though economic conditions deteriorated in the fourth quarter.
The XanGo layoffs are signs of stress in the multilevel marketing industry that generally touts itself as resistant to recessions because people who lost their jobs or who are looking for more income sign up as distributors.
Tahitian Noni of Provo announced a remake of its executive team in February, "part of a new strategy of organizational alignment."
MonaVie of South Jordan, another fast-growing juice drink company, has not had layoffs and continues to see year-over-year growth, said Devin Thorpe, chief financial
officer.
"It would be unfair to say we haven't seen any deterioration from the recession, which is the worst in our lifetime," Thorpe said. But despite conditions, he said, MonaVie continues to see "rapid" growth this year.
A fourth nutritional fruit juice company, Zrii LLC of Draper, recently had its executive management team leave and several top distributors were let go after accusing owner and CEO Bill Farley of financial mismanagement. Farley is suing them, alleging they conspired to get the company on the cheap.
It's not clear whether Zrii will survive, though Farley insists the company doesn't have any debt and will recover.
These nutritional juice companies are privately held and do not release financial data.
Freeze said the evaluation of XanGo's business was undertaken after the company hired Robert Conlee as CEO in October 2008.
"As a result, we will be investing more resources in our marketing and distributor-relations areas while reducing less strategic investments and eliminating duplication," Freeze said in a statement. Besides the layoffs, the company also is not filling current vacancies or those created when people resign, he said.
But Freeze said the company also continues to see a number of distributors join it from competing companies, a sign of faith in XanGo's future.
tharvey@sltrib.com
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