Fitbit to lay off six percent of workforce after disappointing fourth quarter

Fitbit Blaze

After publishing an underwhelming fourth quarter earnings report, Fitbit kicked off the week by announcing a six percent reduction to its headcount.

The company sold 6.5 million devices sold during the final fiscal quarter of 2016, while income for the quarter ranges between $522 million USD and $580 million. Quarterly income was expected to fall between $725 and $750 million.

Fitbit’s earnings report went on to claim that the company had engaged over 23.2 million users on its platform by the end of 2016.

Both annual growth at 17 percent and revenue fell below the company’s previously announced earnings guidance, which follows a declining trend for wearables during the latter half of 2016. The company responded to these numbers by announcing a six percent reduction in global work force this week.

CEO James Park addressed the report by saying that slowdown is part of a temporary “transitional period for Fitbit.” It’s also important to note that Fitbit made headlines several times in 2016 for multiple high-profile acquisitions.

“While we have experienced softer-than-expected holiday demand for trackers in our most mature markets, especially during Black Friday, we have continued to grow rapidly in select markets like EMEA, where revenue grew 58 percent during the fourth quarter. To address this reduction in growth and what we believe is a temporary slowdown and transition period, we are taking clear steps to reduce operating costs,” said Fitbit co-founder park in a statement.

In fact, it was recently reported in fact that the future of Fitbit rival Jawbone’s remains uncertain as the UP3 maker continues its downward spiral after the departure of its CFO.

Source: Fitbit

Via: TechCrunch