The company has laid off 70 to 80 percent of its FuelBand team, about 55 employees based in Beaverton, Oregon and Hong Kong, according to a report by Cnet. Citing an anonymous source familiar with Nike’s plans, the report said that the company is getting out of the wearable hardware business, and appears that its Digital Sport division won’t be producing any new devices. Instead, the company — which confirmed the layoffs in the Cnet report — is going to be focusing on building a software platform that hardware manufacturers can tap into.
A Nike spokesperson did not directly address questions about the layoffs when contacted by GeekWire, issuing this statement:
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.
Nike is committed to Nike+, to NikeFuel and to driving innovations that bring richer experiences for all athletes. We will continue to leverage partnerships to expand our ecosystem of digital products and services, using NikeFuel as the universal currency for measuring, motivating and improving. This can be seen through the Nike+ Fuel Lab which allows us to work with partners in the Bay Area to bring 100 million new members to Nike+ and the NikeFuel platform and deliver even more value to this fast-growing membership.
Partnering with industry-leading tech companies is nothing new for Nike. We have been working with Apple to develop products since 2006, when we introduced Nike+ Running, and Nike has since created iOS Apps including Nike+ Training Club, Nike+ FuelBand and Nike+ Move.
The news comes six months after the announcement of the FuelBand SE, the second version of Nike’s wearable device. While Nike reportedly considered producing a thinner version of the FuelBand, that project was cancelled. Its software products were not affected by the layoffs.
The change in focus also could directly impact Synapse, the Seattle-based product development company. Synapse, which has undergone a number of changes in recent months, including layoffs and executive changes, assisted Nike in the development of the FuelBand. Clayton Wood recently stepped down as president and CEO, handing the reins to founder Ross Collins.
Nike will be opening up a new Nike+ API for developers interested in creating wearable products that tap into its software platform, and the company also recently announced Fuel Labs, an incubator in Silicon Valley for companies that want to make devices that use Fuel. In other words, Nike will leave it up to hardware manufacturers to build the next FuelBand, so long as they use Nike+.
Interestingly, the layoffs come at a time when rumors of an Apple wearable device have reached a fever pitch. Apple CEO Tim Cook sits on Nike’s board, and is a long-time FuelBand wearer. The Cuptertino-based company hired Ben Shaffer, the former head of Nike’s Innovation Kitchen, last fall. It’s too soon to say whether Apple will be getting into the wearable business with Nike’s platform at their back, but it’s certainly an interesting possibility.