Fitbit’s revenue for last quarter fell well below analyst estimates, prompting the company to slash 6% of its global workforce, or more than 100 employees.
The wearable tech company’s revenue is more than $100 million below its own original guidance.
“We are confident this performance is not reflective of the value of our brand, market-leading platform, and company’s long-term potential,” said James Park, Fitbit CEO. “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.”
Fitbit says it plans to realign sales and marketing spend and improved optimization of research and development investments.
“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 Park.
Fitbit sold 6.5 million devices during the quarter.
“We believe the evolving wearables market continues to present growth opportunities for us that we will capitalize on by investing in our core product offerings, while expanding into the smartwatch category to diversify revenue and capture share of the over $10 billion global smartwatch market,” said Park.
Fitbit expects to earn upward of $1.7 billion in revenue in 2017. The company recently acquired two smartwatch startups, including Pebble.