Heart rate-tracking wearable
Jawbone has laid off 60 employees, 15 percent of its workforce, according to a report in TechCrunch. The layoffs extend across the company, but the restructuring includes the closing down of the company's New York City office and downsizing operations in Sunnyvale and Pittsburgh. Jawbone told MobiHealthNews in an email that no further layoffs are planned and issued a short statement.
“Jawbone’s success over the past 15 years has been rooted in its ability to evolve and grow dynamically in a rapidly scaling marketplace," a spokesperson said in an email. "As part of our strategy to create a more streamlined and successful company, we made the difficult decisions to reorganize the company which has had an impact on our global workforce. We are sad to see colleagues go, but we know that these changes, while difficult for those impacted, will set us up for even greater success.”
It's impossible to know exactly what's going on behind the scenes at Jawbone, but this isn't the first piece of bad news for a wearable company that's lately been making more headlines for it's courtroom dramas than for its trackers, one of which recently launched five months late and without the promised waterproofing.
Rumors that the company might be in trouble began in May when Bloomberg revealed that the company's $300 million investment from BlackRock Capital was actually more of a loan, and one with harsh terms at that. Bloomberg also noted that Jawbone was being sued by Flextronics for allegedly not paying its debts and by Avoca Technologies, a Canadian distributor of Jawbone products, and Lorom Industrial, a Taiwanese cable manufacturer, for failing to make good on payments. Shortly after the BlackRock funding, Jawbone laid off 20 employees.
But the company's most high profile lawsuits have Jawbone as a plaintiff, not a defendant, and they've been aimed at competitor and market leader Fitbit. In one suit, Jawbone alleges that Fitbit poached employees who downloaded sensitive data about Jawbone before leaving the company. In another, Jawbone sued Fitbit over alleged infringement of three patents Jawbone obtained when it acquired BodyMedia in 2013. Fitbit also sued Jawbone over different patents, and Jawbone filed a counterclaim against that suit.
In July, a report emerged that Jawbone is trying to get the US International Trade Commission to block Fitbit’s imports into the US based on the same complaints that form the basis of the two lawsuits against Fitbit. And towards the end of August, the ITC confirmed that it planned to investigate Jawbone’s claims, according to Legal Newsline.
On the other hand, it hasn't been all bad news for the company lately. Oprah named the Jawbone UP3 one of her "Favorite Things", which is one of the most powerful celebrity endorsements one can hope for. Jawbone also joined the recent trend of wearables teaming with fashion labels when it announced that BaubleBar, an online jewelry retailer, had launched a line of bracelets that have compartments that can hold Jawbone’s economy tracker, the UP Move. The bracelets cost between $45 and $85. Jawbone also pushed out UP4, which is a version of the UP3 that adds NFC payment features with American Express, just a few months after the belated UP3.
The last two years have seen a lot of shake-up in the activity tracker market. Nike FuelBand has all but backed out of the market (a move that also began with layoff announcements). Basis Band and Misfit, two smaller but well-known wearable brands, have each been acquired: Basis by Intel and Misift by Fossil. Fitbit went public earlier this year with a surprisingly large IPO. And, of course, all these companies are duking it out in the shadow of the Apple Watch and the emerging smartwatch market, though it's still not entirely clear how much of a bite that's taking out of the dedicated fitness tracker space.
