Last week we reported that tracking device maker Tile was downsizing and "refocusing" after it laid off 30 employees and turned away 10 other applicants. The shift seems to be a possible market contraction as its primary competitor, TrackR, just announced a similar move.
Sources close to the company told TechCrunch that 42 staff members have been let go. TrackR would not confirm how many employees were affected but a review on Glassdoor seems to corroborate that number.
A TrackR spokesperson stated the cuts were for reasons similar to the Tile layoffs — that the company needs to refocus the business.
“As TrackR’s strategy evolves, the organization needs to evolve, too. The recent rebalancing of TrackR’s workforce is to ensure the company remains efficient and focused on areas that will deliver on TrackR’s vision. The company is continuing to position itself to lead the item finding space.”
Laying off 42 employees may not seem like much but for a company the size of TrackR, that number is notable. According to estimates, the firm employed fewer than 100 people before the cuts so this was a pretty significant reduction.
The devices have been selling well and have not suffered a slump as Tile did over the holidays. In fact, Amazon lists three TrackR devices among its top 10 best sellers in that category. The problem seems to be the company’s expenditures.
“They are calling it restructuring, but they are burning cash at an alarming rate,” said the insider.
Specifics were not given as to what expenses are eating into the capital.
TechCrunch refers to the recent layoffs in the industry as a “market contraction” but I’m not convinced that the market is contracting.
Demand for tracking devices seems to be steady. In fact, I wanted a Tile over the holidays but couldn’t find one in any of the stores when I was out shopping and had to order online. So the demand seems to be there. However, there is a lot more competition now.
When Tile and TrackeR were initially founded, they practically had the market to themselves. Now there are a dozen other competitors, especially some out of China producing cheap knockoffs trying for a piece of the tracking pie. Naturally, the internal structures of these companies are going to have to change if they want to survive.
We will have to wait until the market settles to see who is left standing.