Fitbit will lay off 110 employees amid “softer-than-expected” demand for its products last holiday season, the wearables company announced Monday.

For the fourth quarter of 2016, Fitbit said it expects revenue to come between $572 million to $580 million, which is lower than its projected $725 million to $750 million. While Fitbit didn’t specify which departments would be affected by layoffs, the company said it plans to trim operating costs by around $200 million for 2017.

In its post, Fitbit CEO Jack Park said while the company doesn’t believe the quarterly drop is a significant issue, it still plans to focus on long-term development.  

“Looking forward, we believe Fitbit is in a unique position to stimulate new areas of demand by leveraging the data we collect to deliver a more personalized experience while developing upgraded versions of existing products and launching additional products to expand into new categories.” Park said.

For Fitbit, a new smartwatch is among the company’s upcoming products and Park officially confirmed the company's plans to enter the market. “We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch.” Park said.

Fitbit’s recent moves have looked to bolster its resources for an upcoming smartwatch launch. In the past year, Fitbit has acquired smartwatch companies Pebble and Vector Watch, along with payable device company Coin. The company also announced plans to launch its own app store “as soon as possible.” While Fitbit has yet to announce details for their upcoming smartwatch, it’s a clear bet on Fitbit’s part to target general users outside of the company’s traditional fitness market.