Beachbody is laying off a third of its workforce and switching to an affiliate model

Beachbody will cut a third of its workforce and overhaul its business model as part of a restructuring aimed at saving tens of millions of dollars.

The Southern California-based fitness and nutrition company announced Monday that it would transition from its multi-tiered direct-to-consumer marketing structure to a single-tier affiliate program, scheduled to launch in November.

Under the old structure, independent distributors, or “coaches,” promoted and sold Beachbody products directly to consumers and recruited others as coaches—earning commissions and sales through subscriptions.

The new model envisions an “omnichannel sales channel approach” that is “simpler” and “more modern,” as the company calls it.

Under the affiliate model, the company financially rewards an individual for increasing traffic, leads or sales through advertising and marketing efforts.

The company, which currently employs around 580 people, will lay off almost 200 as part of the restructuring.

Beachbody said it expects the cost-cutting measures will save the company $54 million in overhead costs.

The company said the layoffs will also lower its break-even point from less than $430 million in annual sales to less than $225 million in annual sales.

“While these steps are absolutely necessary to align the company with its new strategic direction, the painful part of this decision is the departure of part of our team,” said Carl Daikeler, CEO and co-founder of Beachbody, in a statement.

Beachbody said it expects revenue in the range of $97 million to $107 million for the third quarter ending Sept. 30.