Fitbit is top wearable fitness devices producing company. The company is struggling with financial problems, revenue of company has been decreased to an alarming point. In the response of this market share loss the company has decided to lay off, it’s 6% employees, which are in number 110 employees.
The company board voted on last Wednesday that they are going to downsize their employees around 6 %. Meanwhile, the company has 75 % shares in the market and analyst are hopeful about the growth of the company.
The fourth quarter of 2016 company’s expectations were to generate $570 million but fitbit managed to generate $572million to $582million. This is much lower than the expected revenue. James Park, CEO and co-founder of Fitbit has said about fitbits revenue degeneracy that the missed objectives are some weaknesses in the system which is not yet known. The decrease in revenue does not affect the brand value and the company will sort it out in the long run.
Park the CEO of the company said that he is hopeful for the future of the company. He is expecting that the revenue will not affect the brand value of the company.
Despite revenue decrease company is able to manage large scale growth in the Middle East, Europe and Africa on Black Friday.
Causes of downsizing:
The possible reasons of layoff, are suggested by R&D for long run strategical policy making. To build more focused and efficient workforce: This shows the company is expected to pay $4 million for the first quarter of 2017. This is a big amount to pay for the company when it is going on low profit.
Fitbit is running around $200 million of loss in 2016. While the company is optimistic about the future to cover the $850 million in 2017.
As the fitbit is leading wearable technology firm, it is taking direct action to enhance the performance and revenue. Park is optimistic for the future of the company, the would be doing well to meet the smartwatch demand of customers. He also noticed that there is a large demand for Pebble, Coin and Vector Watch.