Fitbit Expected to Announce Layoffs in Fourth Quarter Results

[Xenomorph]

I got a bunch of their products... and then they all started falling apart and breaking. They replaced two under warranty. Those are now failing.

My current "Charge HR" is held together with super-glue. The previous one (also held together with super-glue) had some weird hardware failure and just stopped working.

I would have a new "Charge 2" by now if I could trust the damned things. $199 for something less durable than a $10 pedometer? I understand that I'm paying for the R&D, software, and the experience, but come on!

Since you can get an Apple Watch for $199, Fitbit has dropped the prices of their stuff a little bit, but I may still go for an Apple Watch.

 

[Stella]

Fitbit have all their eggs in one basket. If wearables become unpopular, the entire company suffers, unlike its competitors such as Garmin. Garmin's other products will help it through the slump.

 

[frankgrimes]

Fitbit have all their eggs in one basket. If wearables become unpopular, the entire company suffers, unlike its competitors such as Garmin. Garmin's other products will help it through the slump.

Exactly also Fitbit adding useless features like Social Media to their apps does nothing for improving the product.

I still have my old but gold Polar watch for gym activity, no apps, no internet connection no gimmicks but guess what it's very accurate and gets the job done.

As far as Garmin their navigation systems are still one of my favourites

 

[pkissel]

I'd blame it on poor build quality and poor customer support. I loved my Fitbit but after it kept repeatedly falling apart I just walked away from the brand.

 

[manu chao]

Thanks for clarifying my motives and intent. I didn't realize you were me. What else am I thinking? You take a small point and turn it into something totally not what I'm saying at all. That's mischaracterization.

No, you state a truism (10'000 steps is an arbitrary number) that adds nothing to the debate but makes your other points appear more valid. This is a classic tactic, say something that is a correct statement and that is peripherally connected to the argument in question (do fitness trackers have a medium-term future). Nobody can refute it, nobody can attack you for it, because on paper, you have said nothing wrong. But it still manages to make a point on the main argument (do fitness trackers make sense) by association. Make the 10'000 steps goal look fishy and without having to say a word, fitness trackers start to look more bogus.

Maybe you do this all subconsciously but it is having exactly the effect I described.

I posted links to reputable articles demonstrating the point I made that people can, and do, cheat with pedometers.

Because that is the kind of news that generates articles. People just using fitness trackers out of their own accord doesn't generate news. These articles are exactly the same anecdotal evidence that you just excoriated.

I didn't indicate anywhere whether they were the bulk of sales or not. That's another position you assign to me in order to argue against. My only point, as was fairly clear, was disputing your invented notion that 99% of people with fitness trackers are motivated solely by challenging themselves. You can't prove that statement. And if cheating is rampant in corporate wellness programs where a certain amount of people have trackers then it's likely indicative of a larger than 1%.

Oh yes, you did. May I quote you?
"And given how rampant cheating is in all these step challenges I think it won't take many years before companies, and people, stop seeing them as more than they are."

You predict the downfall of this category because a big part of the devices are used for cheating. For the cheating to be relevant for the viability of fitness trackers, it has to be substantial.

 

[julesme]

My crude analysis would be the same as GoPro: People who want one already have one. People who don't yet have one will never buy one.

Their futures lies in other fields related to the products they're best known for (ie video and wearables), but neither will be the next Apple based on a single product.

I don't think it's fair to say that people will "never buy" a wearable such as Fitbit or AW. They might never buy the current iteration of Fitbit or a Series 2 AW, but 3-5 years from now, the functionality will be much greater.

I think voice activated functionality (Siri etc) will make wearables a mass market device. The devices will become "must have" only after the voice activated assistants become must have (3-5 years from now?).

 

[nwcs]

You predict the downfall of this category because a big part of the devices are used for cheating. For the cheating to be relevant for the viability of fitness trackers, it has to be substantial.

No, that's not predicting downfall. That's saying identifying them for what they are: simple tools that record steps with a lot of parlor tricks added on. But if there is a downfall it would be for people placing a disproportionate amount of trust in the numbers provided.

No, you state a truism (10'000 steps is an arbitrary number) that adds nothing to the debate but makes your other points appear more valid.

It was a one-off statement based upon the fact that all these trackers recommend 10,000 steps a day. As for the comment about adding to the debate... that's just forum speak intended to silence people.

Because that is the kind of news that generates articles. People just using fitness trackers out of their own accord doesn't generate news. These articles are exactly the same anecdotal evidence that you just excoriated.

Um, no. They are actual facts that people are cheating systems and contests relying upon numbers. That's not anecdotal. And there are more articles out there on the subject. As for people using fitness trackers not generating news... come on, you can't be serious. There's been article after article of people extolling their virtues from the first fitbits to the Apple Watch 2 and its fitness and GPS capabilities.

 

[Ted13]

That's more of a fad, where as the fitbit provides more benefits I think

GoPro is much less of a fad: people who use it to make movies that end up at the New York Film Festival aren't exactly using it because it is a fad. The GoPro simply has a strictly limited number of real clients, the rest could simply use an iPhone instead, ever more so with each update.

FitBit OTOH is a fad.

 

[smirking]

Their popularity is largely due to the social engagement (being able to battle friends in the accumulation of steps).

I would speculate that the real reason for their popularity is because a lot of people buy a Fitbit for aspirational reasons more so than practical ones. They're like gym memberships that only get used in the month of January. People buy them expecting it to help motivate them, but in the end the only thing that can motivate you is yourself.

I have a Fitbit myself, but I got it for entirely different reasons than most people. I have a sleep disorder and it's a sleep tracker for me first and foremost. It actually does a pretty fair job of figuring out if I'm asleep or not.

I have the Blaze. It's pretty good at tracking resting heart rate or for light activities, but if you're doing anything high intensity, forget it. You're not going to get accurate high intensity heart rates from a wrist sensor even if it says Garmin on the other side.

 

[britboyj]

I wonder if some of this layoff is due to overstaffing things to their previous acquisitions?

 

[44267547]

How does ~160 employees equate to 200 million in cost savings? 160 employees at 100k each plus another 100k of employer "costs" is 32m. How do you get to 200m?

It depends on the specific person we're talking about they're laying off. It could be referring to engineers or teams in software development, likely equating to those who make large amounts of income. Those numbers have to be rated from somewhere. Unless the article is inaccurate.

 

[jweinraub]

Don't all shout at me but everyone who I know has a Fitbit ... how are they making a loss!

Perhaps it is their generous warranty. I had two fitbit replacements on the Charge HR. Both were free to replace. Not too sure what their cost was, but eventually they gave me a discount to get the Charge 2. Hadn't it been for the discount I either would replaced it one more time, the free one, or just abandon the product.

While you are right, a lot of people have one, they aren't upgrading to newer ones as the newer ones don't offer any incentives to make it worth spending the money. Thus the loss of sales.
[doublepost=1485806769][/doublepost]

I had a Fitbit Blaze and Fitbit Flex. I traded both in for an Apple Watch.

Fitbit counts steps well and the social aspect is the killer feature. Their trackers (even the top of the range ones) feels very cheaply made, even more so compared to an Apple Watch SS.

I wanted a smart watch that offered notifications and fitness features. It also had to replace my watch. The Apple Watch feels like a watch that also does other things. The Fitbit blaze's vibration was terrible the Apple Watch vibration is superb. The fitbit felt like a tracker replacement but not something to replace my watch.

Everyone I know has/had a Fitbit but a large portion of those have sold and moved onto an Apple Watch.

Once you try an Apple Watch, there is no going back! It's like going from 5.1 to stereo.

Also Fitbit features were intentionally held back to encourage you to buy the next model that come out. You can vote for features, which seems pointless as the features with the most votes never get implemented (healthkit for example).

If Apple released a basic fitness tracker, marketing it as "compete with your friends," "30 day battery life," etc it would bye bye Fitbit.

The healthkit thing bothered me and initially retutned it because of it;. Got the jawbone insteade since it was my first tracker when it was still a 3.5 mm transfer device as they didnt believe in bluetooth. it worked, but honestly despite wearing the fitbit to bed and all the time, i find i am actually using the app less and less. i know i sleep lousy, i know i dont walk enough, and jawbones coach was superior. maybe if they combine hte IP of all it would be ideal, but i have friends that use apple watch and fitbit, and i wear a traditional analogue watch and my fitbit.

 

[Bart Kela]

How does ~160 employees equate to 200 million in cost savings? 160 employees at 100k each plus another 100k of employer "costs" is 32m. How do you get to 200m?

The $200 million isn't going to come from just cutting employees (about 110 people according to the company). Fitbit plans to cut back on sales and marketing expenses and consolidate its R&D efforts, and those aren't the only two areas that they can cut back on.

Fitbit is also carrying excessive product inventory, wrote down component inventory, and spent a lot on rebates and pricing promotions, all of which affect gross margin according to their press release.

Bear in mind that a reduction in force also creates additional expenses in the form of severance packages, accrued vacation, etc.

 

[TwoBytes]

Well fitbit just hired lots of Pebble staff so i'm not sure if the reduction in staff might just be balancing them out. Besides this, losing your job sucks and isn't great news.

 

[unobtainium]

Not a chance to compete, with Apple going all in in applied medical research and AI.

However, Fitbit's app is so, so, so much better than Apple Health, or any of the other fitness apps. I think they should move to a subscription model on other devices (including Apple Watch) and continue to sell basic hardware for those who just want a simple fitness band. Trying to compete in the higher or mid-tier hardware segment is pointless.

 

[manu chao]

Um, no. They are actual facts that people are cheating systems and contests relying upon numbers. That's not anecdotal. And there are more articles out there on the subject. As for people using fitness trackers not generating news... come on, you can't be serious. There's been article after article of people extolling their virtues from the first fitbits to the Apple Watch 2 and its fitness and GPS capabilities.

There are anecdotal in regard to proving that a significant part fitness tracker users cheat, simply because there is no data in them about what percentage of fitness tracker users are part of such programs.

 

[Stella]

GoPro is much less of a fad: people who use it to make movies that end up at the New York Film Festival aren't exactly using it because it is a fad. The GoPro simply has a strictly limited number of real clients, the rest could simply use an iPhone instead, ever more so with each update.

FitBit OTOH is a fad.

GoPro haven't done themselves any favours with their production issues. They haven't been performing well for around 1 year or so.

 

[Abazigal]

GoPro is much less of a fad: people who use it to make movies that end up at the New York Film Festival aren't exactly using it because it is a fad. The GoPro simply has a strictly limited number of real clients, the rest could simply use an iPhone instead, ever more so with each update.

FitBit OTOH is a fad.

The problem I see is that there is nothing stopping competitors from making GoPro alternatives which are cheaper and do the same thing. That's the problem when your product is solely hardware without software to serve as a key differentiator. It gets commoditised very easily.

 

[44267547]

Well fitbit just hired lots of Pebble staff so i'm not sure if the reduction in staff might just be balancing them out. Besides this, losing your job sucks and isn't great news.

I know Fitbit purchased Pebble. But I didn't see anything about them hiring any of Pebbles previous staff? Do you have a link to this?

 

[britboyj]

I know Fitbit purchased Pebble. But I didn't see anything about them hiring any of Pebbles previous staff? Do you have a link to this?

You're correct, but I think much of what they got from Pebble likely makes some of their current staff redundant.

 

[Bart Kela]

I know Fitbit purchased Pebble. But I didn't see anything about them hiring any of Pebbles previous staff? Do you have a link to this?

I'm sure it's in the press release announcing the acquisition. Go visit the investor relations section of Fitbit's website, you'll find it.

As a publicly traded company, Fitbit is obligated to make some sort of statement about what is happening with the companies that it acquires. Details like increased payroll/staffing are important to current and future shareholders.

 

[travisjaymoore]

How does ~160 employees equate to 200 million in cost savings? 160 employees at 100k each plus another 100k of employer "costs" is 32m. How do you get to 200m?

I had the same immediate question. At the max of 160 employees, that's $1,250,000 PER employee! Even with some huge cuts besides workforce, the math still doesn't add up.