Yesterday CNET broke the news that Nike was laying off the majority of its 70-person hardware team. Reportedly total lays off amount to 55 people. The 70-person hardware group forms part of the larger Digital Sports Division. The majority of those laid off, roughly 30 individuals, office in Hong Kong, with the remaining individuals residing at Nike headquarters in Beaverton, Oregon.
Is Nike exiting the wearables game altogether? Is the company focusing solely on the software side of wearables and removing its hardware focus? Or is Nike moving to a platform-specific partnership such as partnering with Apple in its much anticipated, and heavily rumored, iWatch efforts?
Nike hasn’t made any of the above clear after the lay offs. Rather the company stayed committed to its existing FuelBand products and customers:
“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,” commented Nike spokesperson Brian Strong.
Photo: Nike FuelBand
The Nike Digital Tech division, which oversees web software products, was not affected in this move.
Nike’s decision to move away from hardware and focus on its Nike+ products, is definitely surprising. The Fuelband had experienced success in the now crowded fitness tracker market. Though, this crowdedness may make the decision to focus on its Nike+ API and avoiding often slim margined hardware products may be a wise move. Supporting others’ hardware efforts, namely the likely Apple wearable, would allow Nike to continue to grow its Nike+ user base, while allowing others to duke it out in the device wars.
Whatever the end game may be for Nike, at least one employee took to anonymous posting network Secret to provide their opinion into the matter.