Fitbit will announce its fourth quarter earnings later today and it is likely to be below street expectations. According to The Information, Fitbit's results will not only miss street expectations but also come with a layoff of up to 10 percent of its workforce. The layoff is expected to affect between 80 and 160 people.
It is not clear which department of the company will be affected by the layoff but the company hopes to save around $200 million in the process. The wearable industry is going through a sluggish phase with interest waning in both smartwatch and fitness bands. A recent Gartner report indicated that wearables suffer from a high abandonment rate due to lack of objectivity around them.
Fitbit recently acquired smartwatch makers Pebble and Vector and has expressed interest in acquiring fitness wearable company Jawbone. The company is reportedly working on its own App Store with Pebble's software team in an effort to transform itself from an hardware startup to software provider. The Information says Fitbit's dedicated App Store will also be open to third-party developers for seamless integration with their services.
Fitbit continues to deliver one of the finest wearable fitness tracker in the market, but its fortunes are limited by lack of enthusiasm among consumers for these products.