CNET are reporting that the sportswear giant has taken the decision to cease all production of the FuelBand and instead concentrate on software for the foreseeable future.
Nike spokesman Brian Strong told CNET: "As a fast-paced, global business we continually align resources with business priorities.
"As our Digital Sport priorities evolve, we expect to make changes within the team, and there will be a small number of layoffs. We do not comment on individual employment matters."
A source close to CNET claimed that the 70-man hardware team behind the FuelBand have already been informed of the companies new strategy, and around 50 of those developers have lost their jobs. It is not currently known what will be of the remaining 20 Nike employees.
Nike was scheduled to release a new version of the FuelBand sometime in the Autumn that would be even slimmer than its predecessor. However along with the Nike+ Sportwatch and all other digital sport peripherals, these plans have all been shelved.
It is understood that Nike will continue to sell the second generation of their fitness tracker, the FuelBand SE. The company confirmed this in a statement to CNET saying: "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 might just be pulling out of the wearables market at just the right time as competition for market share gears up. Samsung have already released the Gear Fit, Google have announced Android Wear and with speculation growing that Apple is going to release an iWatch that heavily incorporates health and fitness, it seems the wearables market is soon going to be flooded with new, more sought after alternatives.