Gaia sheds one-fifth of workforce amid legal battles
This story originally appeared in BusinessDen, a BizWest news partner.
LOUISVILLE — Gaia, the Louisville-based streamer of yoga videos and conspiracy theories, has laid off 36 full-time employees, or about 20% of its workforce, investors were told March 6.
The job cuts will allow the company to save $5 million in salaries and benefits, Gaia claims. It lost money last year after paying $2 million to the Securities and Exchange Commission.
Founder and CEO Jirka Rysavy said during an earnings call that the laid-off employees were “mostly contractors that were added over the last two years to offset” reduced productivity when Gaia employees worked from home. He claims productivity dropped 30 percent.
Gaiam began as a yoga company in Boulder in 1988. It launched Gaia, a publicly traded streaming service, in 2011 focusing on yoga, meditation, and alternative ideas. Gaia moved to Louisville in 2019, expanding its paid subscriber list to 800,000 and its market value to $200 million by 2021.
But more recently, legal problems have piled up. In a November report, Gaia revealed it had been under investigation by the Securities and Exchange Commission since mid-2020 and was settling the case for $2 million. Its chief financial officer was fined $50,000.
“We are awaiting final approval from the commission on the proposed settlement and have no further updates at this time,” CFO Paul Tarell said March 6. “With the proposed settlement, we anticipate our ongoing legal fees related to this matter will no longer be a headwind.”
Gaia lost $900,000 in the fourth quarter of 2022 and $3.1 million total last year. Rysavy called it a “challenging year” in which some subscribers who signed on during the homebody days of the pandemic moved on to other forms of entertainment and ended their subscription.
“But we have already seen overall member growth in 2023,” Rysavy said on the call. “During 2023, we expect the business to generate about $7 million to $9 million of new cash.”
He anticipates Gaia to make gains in France, Germany and Mexico this year. Gaia is also launching an online marketplace that will boost revenue, the CEO told investors.
Meanwhile, SEC case aside, Gaia’s legal headaches have not gone away entirely.
A 3-year-old case in which Gaia is being sued by former host Corey Goode of Broomfield and countersuing Goode for defamation is ongoing. Goode, who claims to talk with aliens, says Gaia hired an imposter who claims to talk with the same aliens after Goode left Gaia. Gaia says Goode defamed the company when he claimed it promotes pedophilia and cannibalism.
In another ongoing case, Gaia is accused by an Argentinian film company of stealing an idea for a documentary about Matias De Stefano, a man who says he has lived many lives spanning hundreds of years and can recall all of them. Gaia says it didn’t know De Stefano was under contract and argues that the facts of De Stefano’s life cannot be copyrighted.
Two class-action lawsuits against Gaia are also progressing in federal court. In the first, filed last September, Gaia is accused of violating privacy laws by handing subscribers’ personal information to Facebook, which streams Gaia videos. Gaia has denied wrongdoing.
In the second class-action case, filed Dec. 20, shareholders accuse Gaia and its top executives of inflating subscription numbers and not disclosing it was under investigation by the SEC. Gaia’s lawyers have not yet responded to that lawsuit in court.
In addition to the SEC matter, Gaia has settled one other legal dispute. In late January, the Japanese corporation NEC dropped its lawsuit accusing Gaia of infringing on NEC patents by streaming its shows to apps at a particular computer code processing rate.