As anticipated, wearable leader Fitbit kicked off the week by announcing a 6 percent reduction in global work force, following disappointing fourth quarter financials.
The company will go into greater detail on today’s earnings call, but a preliminary statement issued this morning details the loss of 110 jobs, as part of a “reorganization of its business” designed to “creat[e] a more focused and efficient operating model.”
The news follows what has been a disappointing several months for the wearable space at large, impacting even Fitbit, the dominant player. As rivals like Jawbone grapple with the future, and the future of the smartwatch space looks downright dismal, however, the Fitbit has been making acquisitions, including the once promising smartwatch pioneer Pebble, which faced its own struggles as the year drew to a close.
The financials detail 6.5 million devices sold for the fourth quarter of last year, with quarterly revenue and annual revenue growth both falling below the company’s guidance range.
CEO James Park addressed the slower-than-expected holiday season in the release, insisting that the slowdown is “temporary” and the result of a “transitional period for Fitbit.”
Looking forward, we believe Fitbit is in a unique position to stimulate new areas of demand by leveraging the data we collect to deliver a more personalized experience while developing upgraded versions of existing products and launching additional products to expand into new categories.
In spite of an also disappointing year for smartwatches, Park added that the company plans to expand its presence in the space, which is likely precisely where a number of the company’s recent acquisitions will come into play.
“We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch: stylish, well-designed devices that combine the right general purpose functionality with a focus on health and fitness,” Park says in the statement. “With the recent acquisition of assets from Pebble, Vector Watch and Coin, we are taking action to position the company for long-term success.”
The company will be competing with a new generation of Android Wear devices when the latest version of Google’s wearable operating system arrives in February.