In an industry that is facing a rapidly growing amount of competition, the fitness tracker maker is letting people go.
Wearable technology device maker, Jawbone, has recently announced that it will be shutting down its entire New York office and, in doing so will be laying off 15 percent of its total workforce.
The company is facing industry consolidation and has responded by taking this step to reduce costs.
The wearable technology company is based in San Francisco. In this move, it has cut back its number of employees by about 60 people. This reduction is not exclusive to New York, as the company has also decreased its operations in Pittsburgh, Pennsylvania as well as in Sunnyvale, California. Though the brand is best known for its health and fitness tracking wearables, it is also a pioneer in wireless speakers and headsets. More recently, it has faced considerable competition from other entrants in the wearable device category, such as from Apple and Fitbit.
As a result of this shift in the wearable technology industry, Jawbone is reorganizing to keep up its competitive edge.
Many other companies in the wearables category have been founding themselves selling out to their larger counterparts. Among the most recent examples of this trend was the purchase of Misfit Inc by Fossil Inc, as the designer watch and handbag brand bought out the fitness tracker company to expand its reach in wearable devices, where it had only previously taken its first steps. According to the Wall Street Journal’s reports on the subject, the sale was for $260 million.
It is clear that consolidation is the current direction of for wearables companies as the industry shapes itself in order to prepare to move ahead. This point was underscored by Jenny Lee, a GGV Capital managing partner. That company is one of Misfit’s investors and Lee stated that the arena as a whole is in a consolidation period. She also stated that it is likely that the market will continue to undergo more evolution as devices are created with more specialized purposes in mind.
Jawbone was first created in 1999 and sold about 500,000 wearable technology fitness trackers in this year’s second quarter, according to estimates from IDC. Comparatively, Fitbit sold 4.4 million during that time period and there were 3.6 million Apple Watch sales.