Smartwatch maker Pebble will lay off 40 employees, which is equivalent to about 25 percent of its workforce, this week, according to CEO Eric Migicovsky.
Migicovsky attributed the planned layoffs to a slow environment for fundraising at Silicon Valley, despite Pebble raising $26 million over the previous eight months in addition to a $20 million crowdfunding campaign on Kickstarter that launched in February last year.
"We've definitely been careful this year as we plan our products," Migicovsky said in an interview with Tech Insider. "We got this money, but money is pretty tight these days."
The layoffs could reveal a trying time for the fledgling smartwatch industry as FitBit, the market leader in the wearable device category, has seen a dramatic dip in its stock over the recent months. Apple has also just recently lowered the base price of the Apple Watch Sport from $349 to $299, which could be in preparation for the launch of the next version of the smartwatch but could also mean the device is not selling as well as the company had hoped.
Pebble itself placed discounts on a pair of its more popular Time smartwatches, taking the price of the Pebble Time Round from $250 to $200 and the Pebble Time from $200 to $150, to keep the company's offerings at a competitive price.
There is a glimmer of hope that the potential of the wearable device industry will continue to be realized though, as research firm IDC predicted that global shipments of wearable devices will reach 110 million by the end of the year. This would represent a growth rate of 38.2 percent and, if it becomes true, would be very good news for Pebble and all the companies operating in the industry.
For Pebble's future, Migicovksy said he wants the company to focus more on the health and fitness functions of its devices, which according to him are the features that have drawn the most interest from users. Pebble, through a partnership with Amazon, will also begin to sell its smartwatches in India next month.
Migicovksy added that Pebble has a vision for where it wants wearable devices to be after five to 10 years. It should be looking to create a must-have device in the category to further fuel the industry's growth, as no other company so far has been able to do so.
