© fitbit Electronics Production | January 31, 2017
Fitbit to layoff 6% as the company misses its target
Wearable tech company Fitbit is taking direct action to reduce the expense basis of the company whilst still trying to maintain necessary investments to drive future growth – meaning layoffs await.
Based on the company’s preliminary financial figures, Fitbit expects to report 6.5 million devices sold and revenues in the range of USD 572 million to USD 580 million during the fourth quarter – this is a far cry from the previous guidance range of USD 725 million to USD 750 million. “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% 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 James Park, Fitbit co-founder and CEO. The company is looking to reduce its operating expense run rate with about USD 200 million, to USD 850 million for 2017. This will include realigning sales and marketing as well as optimising its R&D investments. The big change however is a reorganisation of the company’s business, including a reduction in its workforce, that will impact approximately 110 employees, about 6% of the company’s global headcount. The cost of this is expected to be USD 4 million.
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