Smartwatch pioneer Pebble is laying off 25 percent of its staff amid increased financial concerns. However, this is not entirely unexpected as, since last year, there had been reports of the company being in trouble and had turned to debt funding and loans, as well as traditional investor cash, “in order to stay afloat.”.
Pebble CEO Eric Migicovsky told Tech Insider of the layoffs, which was later verified later by other sources. Migicovsky also confirmed that his company had raised $28 million in debt and venture financing over the past eight months, in addition to a second wildly successful $20 million Kickstarter campaign. As for the layoffs, he had blamed a more cautious outlook from VCs focused on tech as the primary reason for letting 40 of Pebble’s 120 employees go.
“We’ve definitely been careful this year as we plan our products. We got this money, but money is pretty tight these days,” he told the publication.
This news does come in a time that is definitely a trying one for the wearable industry. Fitbit was initially championed as an industry leader after a promising public listing last year, but its stock has gone down significantly in 2016.
Part of the problem here is the fact that smartwatches haven’t taken the market by a storm. The initial response to the category was seen as heralding much potential, thanks to a large way to Pebble’s sudden arrival, but no company has created a watch that has truly wowed and won consumers’ pockets. They are currently seen as gadgets which are nice-to-have but don’t appeal that much to the mainstream users – more like a fashion accessory. Apple has been a bit close to cracking this conundrum by slashing the price of the Apple Watch from $350 to $299.
What are your thoughts on Pebble’s decision to dismiss such a substantial amount of employees? Let us know in the comments below.