Lehi-based XanGo, the mangosteen juice marketer that also produces and distributes a skin care line and vitamin supplements, laid off about a fifth of its workforce in response to underperforming investments.
The privately held multilevel marketing company, which at its peak had 400 employees worldwide, laid off “fewer than 50” employees, Dave Webb, the company’s vice president of communications, said Tuesday. He would not say how many employees the company had prior to the layoffs, which occurred Monday.
“These are great people, … awesome producers, and we were proud of their work. This was not based on performance issues,” Webb said.
Workers who lost their jobs will be allowed to reapply for new positions as they become available, and they are eligible for severance packages, he said.
In a formal statement, XanGo characterized the layoffs as “part of a long-term strategy to ensure the company is nimble and best able to support its strategic goals and quickly seize developing opportunities with full vigor and commitment.”
One of the company’s founders, Gary Hollister, declined to comment when contacted Tuesday.
“We made some build-out investments, and some of those investments paid out great, and some were underperformers, and we realized … that we had to be lean,” Webb said, without providing specifics.
XanGo intends to introduce a new product when it holds its XanGo Bold convention at the Salt Palace Convention Center Sept. 26-28, he said.
Aaron Garrity, brothers Joe and Gordon Morton, and others founded XanGo in 2002.
It achieved early high-flying success, with the founders receiving millions of dollars in profits. By 2006, XanGo was flush enough with cash it bought the rights to put its names on the jerseys of the professional soccer team Real Salt Lake, the first marketing ploy of its kind in the U.S.
The company moved into new headquarters at Thanksgiving Point in Lehi. But troubles have followed success.
Its first investors sued XanGo in 2007, claiming Garrity and other founders were using company funds to pay for lavish personal lifestyles of new cars, home furnishings and jewelry, among other expenses. That suit was settled out of court with the terms kept private.
But then this year co-founder Bryan Davis also sued the founding partners, alleging many of the same complaints as the previous lawsuit. He also alleged misuse of funds, including gifts to an employee who was purportedly Garrity’s mistress. XanGo countersued and the two actions remain pending.
The company has 27 offices, including in places such as Malta; Nice, France; and Tokyo. XanGo also has a packaging and shipping warehouse in Spanish Fork.
Its Lehi headquarters is home to the company’s customer service center as well as all operations related to communications, finance, information technology and marketing.
The layoffs weren’t confined to the Lehi offices, but Webb wouldn’t disclose specifics.
“This is painful for everybody, and especially for those directly affected,” Webb said. “But we are building with anticipation and announcing in convention in September our new product which … can put us into a position of growth.”