Fitbit is expected to announce terrible fourth quarter earnings, according to recent reports. Apparently, Fitbit isn’t doing so well and intends to lay off between 5% and 10% of its workforce which totals 1,600 employees in offices all around the world.
This would mean that between 80 and 160 people will lose their jobs at Fitbit, as the company may have recorded its second consecutive quarter in which it missed its earnings guidance as a direct result of a slowing wearables market.
The company is apparently looking to reduce costs by about $200 million and the board already voted on the job cuts last week. Fitbit didn’t comment on the matter, but recent reports show that the company is looking into creative ways to boost sales.
Fitbit is interested in developing a full-fledged smartwatch
Fitbit is apparently interested in developing an app store and thus opening its wearables to third-party developers, who could bring new features and innovation to the product. The strategy is very similar to Pebble’s move when it came to the market.
In fact, Fitbit did purchase Pebble last month for $40 million and earlier this month, it bought smartwatch manufacturer Vector. Fitbit got Pebble’s operating system and other IP, and it decided to hire Pebble’s developers and testers, while others received severance pay. It’s unclear what the terms will be for the up to 160 people who might be leaving Fitbit in the near future.
Fitbit also hopes to produce a smartwatch that would work with third-party apps. Thus the company would directly compete against major players in the wearables market, including Apple, Samsung and LG. Currently, Fitbit has some devices that have functions similar to smartwatches, including Fitbit Blaze. But the latter doesn’t support third-party apps, which isn’t exactly in Fitbit’s advantage. Some reports say that Fitbit is specifically targeting Apple Watch with its own smartwatch.