Jawbone lays off 60, 15% of staff globally, closes NY office

Some difficult news this week for Jawbone, maker of fitness trackers, speakers and Bluetooth headsets. TechCrunch has learned and confirmed that the company yesterday laid off around 60 employees, or 15% of staff.

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It’s a global round of layoffs affecting all areas of the business; and as part of it Jawbone is also closing down its New York office (which was concentrated on marketing) and downsizing satellite operations in Sunnyvale and Pittsburgh.

In an emailed statement, a spokesperson said the layoffs are part of a wider “streamlining.”

“Jawbone’s success over the past 15 years has been rooted in its ability to evolve and grow dynamically in a rapidly scaling marketplace. As part of our strategy to create a more streamlined and successful company, we have made the difficult decision to reorganize the company which has had an impact on our global workforce,” he said. “We are sad to see colleagues go, but we know that these changes, while difficult for those impacted, will set us up for greater success.”

From what we understand, there are no specific product areas being cut as part of this restructuring. The company, in other words, will continue to sell its Jambox speakers and the Era headset, along with related accessories.

More generally, however, Jawbone has been increasingly focusing is R&D, product and marketing attention on its range of UP fitness trackers.

After some big shipping delays with the newest of those devices, the UP3, Jawbone has been marketing its wearables heavily. It’s also had a recent boost in the form of an endorsement from Oprah, naming it one of her “favorite things” in her holiday issue.

A good word from Oprah can go a very long way in helping with sales of a product. And layoffs leading into the crucial holiday sales season imply that Jawbone may be very much in need of that.

Jawbone is not releasing any recent sales figures for its UP trackers, but it has been feeling the pace of competition this year — both from pure-play wearables companies, and popular hardware brands now making more recent moves into the space.

Going into Q3, Jawbone was lagging far behind its rivals. According to IDC‘s most current figures, for Q2, Jawbone sold just over half a million UP fitness trackers, ranking them number seven among top wearable device vendors and working out to a market share of only 2.8%.

As a point of comparison, Fitbit — a rival also embroiled in a legal dispute with Jawbone — sold 4.4 million devices for a 24.3% share as the top-selling wearables vendor. And Apple and its Watch stormed in with a debut at number two, selling 3.6 million for 19.9% of all sales.

Similar to the concentration of power in smartphones, the market for fitness trackers specifically is currently dominated by a couple of key players, Fitbit and Xiaomi, who together control 70% of the market, according Ben Bajarin of market intelligence firm Creative Strategies.

He tells me that Xiaomi owns the lower end of the fitness tracker market, while Fitbit, with a share of over 50%, dominates the higher end, “making it very hard for others,” he said. Fitbit, he added, “will continue to be the dominant player there for some time.” Jawbone has less than 6% according to his figures.

This is the second round of layoffs at Jawbone since this summer. In June, Jawbone laid off 20 employees just weeks after it raised $300 million in financing in the form of a convertible loan from BlackRock. In light of news, those layoffs look more like part of a bigger strategic plan to cut costs and focus more. Just days after the news of 20 cuts, the company announced a new CFO, Jason Child, who joined from Groupon; a new president, Sameer Samat (who joined from Google) started at Jawbone later in June.

In total, privately held Jawbone has raised just under $820 million in funding from investors that include, in addition to BlackRock, Andreessen Horowitz, Kleiner Perkins, Sequoia and Yuri Milner.