Pebble lays off 40 employees, about 25% of staff, blames tough fundraising climate, has raised $26M over last 8 months on top of $20M Kickstarter campaign
smartwatch bubble ready to burst? MacNN : Pebble laying off 25 percent of workforce this week István Fekete / iPhone in Canada Blog : Pebble Lays Off 25% of Staff Amid Increased Financial Concerns Valentina Palladino / Ars Technica : Pebble to lay off 25 percent of workforce JC Torres / SlashGear : Pebble lays off a fourth of its staff as budget issues loom Rohit KVN / International Business Times : Apple Watch gets price cut in India Aaron Mamiit / Tech Times : Pebble To Lay Off 25 Percent Of Workforce: Trouble In The Smartwatch Industry? Paul Hill / Neowin : Pebble set to cut 25% of its workforce Elyse Betters / Pocket-lint : Pebble lays off 25 per cent of entire staff, says ‘money is tight’ Duncan Riley / SiliconANGLE : Smartwatch maker Pebble laying off 25% of staff due to VC fundraising shortage Todd R. Weiss / eWeek : Smartwatch Vendor Pebble Lays Off 25 Percent of Its Staff Ian Hardy / BetaKit : Pebble lays off 25 percent of its staff after raising $26 million over last eight months Jacob Kleinman / TechnoBuffalo : Pebble facing big layoffs, still has big plans for the future (Updated) Shawn Knight / TechSpot : Pebble is cutting a quarter of its staff, blames a cooling fundraising environment Katie Marsal / AppleInsider : Days after Apple Watch's $50 price cut, competitor Pebble lays off 25% of staff Kris Carlon / Android Authority : Pebble is cutting 25% of its work force, because “money is pretty tight” Michael Harthorne / Newser : Layoffs Could Mean Smartwatches Are Running Out of Time Christian de Looper / Digital Trends : Pebble says ‘money is pretty tight,’ as it lays off 25 percent of its employees Jason Cipriani / Fortune : Smartwatch Maker Pebble Lays Off 25% of Staff Stephen Schenck / Pocketnow : Pebble preps for substantial layoffs: “money [in Silicon Valley] is pretty tight these days” Jon Fingas / Engadget : It's not easy being an indie smartwatch maker in a sea of tech giants. Jake Smith / ZDNet : Wearables in flux? Pebble is laying off 25 percent of its workforce Ian Hardy / MobileSyrup.com : Pebble lays off one quarter of its staff, says it's still in for the ‘long haul’ Nate Swanner / The Next Web : Pebble slashes 25 percent of its workforce as it refocuses on fitness Alex Wagner / PhoneDog.com : Pebble laying off 25 percent of its staff this week Jacob Kastrenakes / The Verge : Pebble is laying off 25 percent of its staff Joseph Keller / iMore : Pebble set to lay off a quarter of its staff this week Dan Rosenbaum / Wearable Tech Insider : Pebble Lays Off 25 Pct of Staff, Blames Slow Fundraising John Gruber / Daring Fireball : Pebble Layoffs — Steve Kovach, writing for Tech Insider: Brett Molina / USA Today : Pebble laying off 40 employees Tweets: Benjamin Mayo / @bzamayo : You can also reasonably argue that if the Apple Watch was selling like gangbusters, they wouldn't drop the price. pic.twitter.com/x6i2oO3aLw Harry McCracken / @harrymccracken : In other shrinking-startup news, sounds like Pebble is recalibrating its self to compete with Fitbit more than Apple http://www.techinsider.io/... Dan Seifert / @dcseifert : not only did pebble lay off 25% of its staff today, earlier this year it lost the key player behind its software http://www.theverge.com/... Will Oremus / @willoremus : it's almost like kickstarter isn't a sustainable revenue model https://twitter.com/... Steve Kovach / @stevekovach : FitBit tanking, Apple Watch price cut, Pebble layoffs. Remember when smartwatches were gonna be the next big thing? http://www.techinsider.io/... Casey Newton / @caseynewton : @Techmeme you might say it's a bit rocky over at pebble Thanks: @alexeheath
Context & Ripple Effects
Pebble's March 2016 cuts came less than a year after it had built Pebble Time under pressure from Android Wear and Apple Watch (built Pebble Time amidst looming competition), and after raising $26M on top of a $20M Kickstarter war chest. Blaming a cooling fundraising climate rather than product failure was the tell: hardware burn rates were outpacing what venture capital would fund against Apple.
In hindsight this was the first public crack before the endgame — by December Pebble had shut down entirely, sold its software to Fitbit (Fitbit confirmed the software assets acquisition), cancelled Pebble Time 2 and Core, and refunded Kickstarter backers, with a postmortem citing competition from Apple, supplier payment trouble, and fizzled deals with Intel and Citizen (behind Pebble's demise).
First-order effects
- Forty Pebble employees lose their jobs immediately, and the company must stretch $26M of recent funding across a smaller payroll while competing against Apple Watch.
Second-order effects
- Suppliers and component partners face a customer struggling to pay — the postmortem later confirmed difficulty paying suppliers as a core factor — pushing Pebble toward asset sales rather than new hardware cycles.
Third-order effects
- Independent smartwatch makers without a platform parent get squeezed out: Fitbit ends up buying only Pebble's software assets, and eMarketer cuts its US smartwatch growth forecast from 60% to 25% YoY citing no clear use case (eMarketer's forecast cut) — the category consolidating around watch-OS incumbents.
The trend: Standalone smartwatch startups are being consolidated into fitness-platform acquirers as Apple's Watch and a weak use-case narrative close off independent hardware economics.