Activity tracker specialist Fitbit on Monday announced as part of its preliminary fourth quarter 2016 results that it is conducting a reorganization of its business that'll see it jettison roughly six percent of its global workforce, or around 110 employees.
Fitbit said the job cuts, resulting in a $4 million charge to be recorded in the first quarter of 2017, will create a more focused, efficient operating model and reduce the expense basis of the company.
The job cuts come on the heels of a handful of major acquisitions.
Fitbit in May 2016 purchased payment assets from financial technology company Coin. In December, the company added select assets from smartwatch pioneer Pebble - including key personnel and intellectual property related to software and firmware development - to its stable. Earlier this month, it was announced that Fitbit had acquired the Vector Watch team and software platform.
Given the timing, one would suspect that Fitbit is simply shedding excess manpower as a result of the recent acquisitions.
In Fitbit's revised guidance for Q4, the company expects to report sales of 6.5 million devices with revenue in the range of $572 million to $580 million. That's down from its previous guidance range of $725 million to $750 million. Annual revenue growth is now expected to be approximately 17 percent versus previously forecasted growth of 25 percent to 26 percent.
The company's shares continue to take a beating on the stock market with its value down 12.75 percent to $6.29 as of writing on today's news. At its peak in July 2015, Fitbit shares were trading at $47.60.
Fitbit will report fourth quarter and full year 2016 financial results in a conference call with investors on February 22, 2017.