Reports broke out that Nike is finally out of the game -- of producing wearable devices, that is. In addition, the company allegedly fired this week the majority of the engineering team that made possible the creation of the fitness tracker called FuelBand, said an unidentified source of CNET claiming to be familiar with the issue.
Allegations about the firing of employee also came out on the Secret social network.
"The douchebag execs at Nike are going to lay off a bunch of the eng team who developed the FuelBand, and other Nike+ stuff. Mostly because the execs committed gross negligence, wasted tons of money, and didn't know what they were doing," said the post.
Based on CNET's source, Nike told the hardware team composed of 70 people of the job cuts, of which 55 people were let go. The hardware team is part of the Digital Sport division with around 200 people. Residing at Nike offices in Hong Kong were around 30 employees, while the remaining employees were in Beaverton, Ore., headquarters. Some employees will remain with Nike till May, while the number of present employees who allegedly have been recruited internally to join other divisions in the company remains unclear. The Digital Tech that is responsible for the Web software has not been affected.
Asked for a comment, spokesman Brian Strong of Nike emailed general statements.
"As our Digital Sport priorities evolve, we expect to make changes within the team, and there will be a small number of layoffs. We do not comment on individual employment matters," he wrote in the email.
One thing is clear for now: the company will continue to sell the second generation of FuelBand SE and enhance the Nike+ FuelBand App, among others.
The company earlier intended to release a slimmer version of the FuelBand, though it eventually cancelled the said project. What's interesting is that all future physical product projects under the Digital Sport helm have been cancelled as well.
Market analysts said Nike might be getting out of the soon-to-be-crowded wearable tech market, with possibly new wearable devices coming up from industry front-liners such as Apple and Google. Others, meanwhile, said it isn't over yet as Nike is set to shift from hardware to fitness and athletic software production, seen to benefit the company even more in the future.
