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Pebble Lays Off 25 per cent of Workforce

Tim Maytom

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Smartwatch manufacturer Pebble is laying off a quarter of its staff amid increasing financial concerns at the firm, which has been surrounded by rumours of money trouble since last year, when it turned to debt funding and loans in order to stay solvent.

Despite record-breaking crowdfunding campaigns for both its initial smartwatch and the colour-screened followup, and a healthy injection of investor cash, the company's attempts to compete with the growing smartwatch market, in particular the Apple Watch, have left employees unhappy about the direction of the firm and investors unwilling to stump up more funding.

Speaking to Tech Insider, CEO Eric Migicovsky disclosed that 40 employees would be laid off this week, account for around 25 per cent of the total staff at the company. This is despite the fact that, on top its $20m (£14m) Kickstarter campaign from last year, the company has raised $26m in the last eight months.

"We've definitely been careful this year as we plan our products," said Migicovsky. "We got this money, but money is pretty tight these days. We want to be careful. Pebble is in this for the long haul. We have a vision where wearables will take us in five to 10 years, and this is setting us up for success."

Migicovsky blamed Pebble's troubles on the atmosphere among Silicon Valley investors, who are becoming increasingly reticent to fund unsure ventures, but the wearable technology market overall has had a tough couple of months after initial enthusiasm.

Apple dropped the price of its Apple Watch by $50 this week, indicating that it is not selling as well as hoped, despite expectations that it will make up over half the smartwatch sales this year. Meanwhile, another market leader in wearable tech, FitBit, has seen its stock fall dramatically in recent months.

Many industry figures are starting to question whether wearables, which were once the 'next big thing', will ever find the truly essential use case that elevates them to the same level as smartphones. Until then, companies like Pebble will struggle to stay afloat.