Last November, a study was released suggesting Fitbit devices do not improve weight loss. Now, the company announces they will be cutting 6% of their global workforce, after a disappointing fourth quarter.
According to a press release, the company announced the layoff of 110 jobs, as part of a reorganization of their business to create a more “efficient operating model.”
The CEO of Fitbit, James Park, addressed the fourth quarter financials calling them “temporary”.
“Looking forward, we believe Fitbit is in a unique position to stimulate new areas of demand by leveraging the data we collect to deliver a more personalized experience while developing upgraded versions of existing products and launching additional products to expand into new categories,” said James Park, Fitbit co-founder, and CEO.
But, Fitbit and the company’s CEO remain optimistic. Park added, “As the overall wearable category leader, we exited the year with an engaged community of over 23.2 million active users, making us uniquely positioned to be the partner of choice for the healthcare ecosystem, which is a key component of our long-term strategy.”
The company plans on cutting operating expenses by $200 million. Also, the reorganization of the company will save the company $4 million in the next few months.
“We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch: stylish, well-designed devices that combine the right general purpose functionality with a focus on health and fitness. With the recent acquisition of assets from Pebble, Vector Watch and Coin, we are taking action to position the company for long-term success.”
However, Fitbit will be facing new competition as Google announced the release of new wearable Android devices earlier this year. Google will release “flagship smartwatches” featuring the latest Android operating system, according to The Verge. The new watches will be able to support several of Google’s major applications including Android Pay and Google Assistant.
But, Fitbit investors are not that optimistic about the future of the company as stocks are trading downward 0.96 points and nearly 14% by afternoon trading.