There had been rumors recently that Fitbit could be preparing to lay off a big chunk of its workforce due to slow wearable sales even though it’s currently the market leader in the wearable device segment. The company confirmed in its quarterly earnings release for Q4 2016 that it didn’t grow as much as it had hoped and is now having to introduce cost-cutting measures which include laying off 6 percent of its entire workforce.
The company announced that it sold 6.5 million wearable devices in the final three months of 2016 and earned close to $580 million against expected revenues of $725 million. Its annual growth came out to 17 percent as opposed to the 25 percent target it had set for itself.
“We are confident this performance is not reflective of the value of our brand, market-leading platform, and company’s long-term potential,” said Fitbit CEO James Park. He pointed out that the company continues to see rapid growth in select markets like EMEA where revenue grew 58 percent during the fourth quarter.
Among the other steps that it’s going to take in order to bring costs down, Fitbit has confirmed in the quarterly earnings release that it’s going to lay off 110 employees which make up 6 percent of its entire global workforce.
Fitbit has been on a shopping spree lately, picking up companies like Pebble and Coin, and it may even have tried to acquire Jawbone. It’s in it for the long haul and it remains to be seen if these measures will help the company be leaner and achieve further growth.
Filed in . Read more about Fitbit. Source: investor.fitbit