In-kind benefits aren't taxed as income, so benefit both employer and employee in that sense, but they're also more likely than cash to never be used and thus become a waste for both parties.

Note in this case they're giving the cash value of the benefits for one year only, so presumably this will save them money in the long run unless they end up having to permaboost salaries, but that is doubtful. Market rate's the market rate and I don't think many people seriously make a decision based on whether one employer offers discounted gym memberships or not.