Fitbit, expected to announce some very disappointing fourth quarter results tomorrow, could layoff up to 10% of its workforce, according to The Information.
As you might imagine, the fourth quarter results were below expectations. They're expected to cut between 5% and 10% of its workforce, which could affect between 80 and 160 people. According to The Information, alongside some reorganization efforts, this should help Fitbit reduce operating costs to the tune of $200 million.
The publication reported that, one of the two people briefed on the news said that these cuts and reorganization were voted on by the company's board on Wednesday.
Right now, the less-than-stellar financial results are blamed on the wearable market's slow decline in interest from consumers — at least as far as Fitbit is concerned, they're just not selling enough to maintain current operating costs, and that's where these cuts are coming in.
This news comes not long after Fitbit acquired Pebble at the end of last year. But, things could start looking up for Fitbit — they also recently acquired Coin's payment platform, which they'll be using to integrate payment options into its products. We don't know how exactly this will be used just yet, but with Fitbit planning to launch its own wearable app store (which will support third-party apps) we could see a new stream of revenue from the company.
Not only that, but it could be clear indication that Fitbit wants to move heavier into software as well, ultimately to diversify its portfolio. We'll hopefully hear more later today or tomorrow.
source: The Information
