IRVING PARK — Midtown Athletic laid off 2,000 employees Tuesday due to the coronavirus pandemic.
The luxury athletic club announced via Facebook Tuesday afternoon it is closing all clubs for at least 14 days in an effort to prevent the spread of the virus.
The announcement did not mention layoffs. But employees who spoke to Block Club said the company laid off 2,000 people Tuesday.
“The entire company with the exception of the corporate office on Elston was laid off. And we’re not sure what’s going to happen to that office right now,” said an employee, who asked not to be named.
Midtown’s corporate office is at 3611 N. Kedzie Ave. The company has eight clubs that include one in Chicago at 2444 N. Elston Ave.
The Health Ministry of Quebec, the state of New York, and Illinois Gov. JB Pritzker asked for Midtown to close six of eight locations, according to Midtown spokesperson Shari Tody.
Midtown’s corporate office will be running with a skeleton crew, but most of the company’s office workers are being temporarily laid off just like our club-based employees. All remaining staff have agreed to significant salary cuts, Tody said.
Steven Schwartz, Midtown’s CEO, announced the layoffs to employees in an email just after 2 p.m. Tuesday. The closure of six of the company’s eight clubs was mandated by the government to help stop the spread of the virus, he said in the email.
“It is my responsibility to have a solid business to come back to when this pandemic is over,” Schwartz said. “My heart is broken, and I am acutely aware of the pain this will cause to many. I wish we could do more, but frankly speaking, Midtown doesn’t have the money to do it.”
Schwartz decided to make the layoffs because while the company has a “healthy balance sheet with a strong cash position” the company isn’t sure how long it could survive an “undetermined period with no revenue.”
Jon Brady, Midtown’s president, sent a separate email to employees Tuesday at 1:58 p.m. also explaining the layoffs.
“Nothing about this is easy, nothing feels good right now — but if we want to have jobs for everyone to come back to, we first need to make sure we have a company that is alive and able to offer jobs,” Brady said in the email.
Salaried staff at the clubs will be paid through March 20.
Hourly and commissioned staff will be paid for “services delivered” through March 16. Also, any hourly, commissioned and salaried employees who have been working at Midtown for five or more years will get one week pay “at your average of the past six months.”
Brady also said employees can use their “accrued vacation and/or sick time pay during this this time.”
While the clubs are closed only a “skeleton crew” will be retained to secure and maintain Midtown’s clubs.
“One thing we will do for everyone is this, if the close-down only lasts 21 days or less and we are back open and can pay bill dues, we will look to make you financially whole once we get back up and running,” Brady said, in the email.
When asked if Midtown would set up a GoFundMe campaign to further help its former employees after the layoffs, Tody said the company is still looking into that option.
Midtown’s Bucktown location completed a multimillion renovation in 2018 to add additional services and a boutique hotel.
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