Nike has laid off 55 employees from its 70-memeber hardware team in charge of the Nike FuelBand, sparking off speculation of the company’s commitment to the FuelBand fitness tracker.
The company informed members of the 70-person hardware team — part of its larger, technology-focused Digital Sport division comprised of about 200 people — of the job cuts Thursday.
Of those 70 employees, about 70 percent to 80 percent — or as many as 55 people — were let go, the person said, asking not to be identified because the information was confidential. Some of the employees will be staying on at Nike through May.
The fitness and wearable technology marketing is a rapidly growing one, so this move comes as a huge surprise to us, but Nike reportedly doesn’t want to abandon its wearable efforts entirely — instead, it wants to shift focus from hardware to software. This is because the company believes that in the long term, smartphones will have come with all sensors currently used in fitness trackers, giving people less incentive to buy dedicated trackers. Nike’s Nike+ Move app was in fact shown-off on stage at Apple’s iPhone 5s event as the first app that will support the M7 motion coprocessor.
Nike, however, denies reports of abandoning the FuelBand in its statement, which says:
As a fast-paced, global business we continually align resources with business priorities. 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.
The Nike+ FuelBand SE remains an important part of our business. We will continue to improve the Nike+ FuelBand App, launch new METALUXE colors, and we will sell and support the Nike+ FuelBand SE for the foreseeable future.
What makes this whole thing more interesting is that Apple CEO Tim Cook sits on Nike’s board, and is reportedly overseeing the development of the iWatch, Apple’s wearable device that will also double up as a health and fitness tracker. Another interesting tidbit: Jay Blahnik, a famous fitness consultant and who helped Nike develop FuelBand is now working on the iWatch project.