Pebble has a rocky future ahead.
The startup is laying off 40 people this week, or about 25% of its employees, CNNMoney has confirmed. The company’s plans were first reported by Tech Insider.
CEO Eric Migicovsky attributes the job cuts to a slowdown in investor activity in Silicon Valley, but the company is also facing a slew of new competitors and a general sense of ambivalence toward smartwatches from consumers.
Pebble was one of the original companies that helped start the whole smartwatch craze a few years ago.
The company’s initial 2012 Kickstarter campaign is still one of the most successful crowd-funded products in history. The original Pebble Watch, with its distinctive e-ink display and affordable price tag, brought in more than $10 million from 69,000 people.
Related: Thinking of buying a smartwatch? Read this first
Last year, Pebble set another Kickstarter record by raising $1 million in 49 minutes for its Pebble Time smartwatch. By the end of the campaign, more than 78,000 people backed the project for more than $20 million.
What a difference a year makes.
Pebble now sees competition from all sides — big and small tech companies like Apple (Tech30), , Fitbit (, Samsung, as well as traditional watchmakers like Fossil and Movado. )
But the biggest problem that all smartwatch vendors share is convincing consumers they need the device.