Fitbit’s recent revenue reports have been hammering the company and this is reportedly forcing the fitness wearables giant to make some tough choices. After its quarterly report on Monday, the company is expected to layoff up to 10 percent of its workforce. Fitbit currently employs 1,600 people and is expected to layoff somewhere between 80 to 160 workers.
According to a report by The Information, Fitbit is set to announce a poor fourth quarter result. The reason behind this being a slowdown in the wearables sector, according to unnamed people familiar with the matter cited by the publication. The expected report comes after a dismal third quarter in November where shares of the company plummeted more than 30 percent during the October-December quarter.
The report further states that the layoffs are expected to save the company approximately $200 million. Fitbit declined to comment on the report but a source reportedly indicated that the company could be interested in developing an app store and opening its wearables to third-party developers.
While Fitbit’s lineup does include smartwatches like Fitbit Blaze, the watch, however, does not work with thrid-party apps due to which the company is unable to take on the likes of Apple and Samsung.
Fitbit’s shift to apps makes sense following its recent acquisition of Pebble and its software in a deal valued at under $40 million (roughly Rs. 270 crores).
In order for Fitbit to recover, the company, with Pebble’s technology, is now perhaps looking to move towards smartwatches and away from fitness trackers which have so far generated poorer-than-expected revenue.
As of now, it isn’t clear whether the layoffs include Pebble employees as well. Fitbit is expected to announce more in the days to come after it releases its quarterly figures.