A startup founded by the creator of Android has laid off about 30% of its staff, according to sources that spoke to Bloomberg News. Andy Rubin started Essential Products in 2015 to create a smartphone with high-end design features that wasn’t associated with a particular operating-system maker. Its first product appeared in mid-2017.
Cuts were particularly deep in hardware and marketing. The company’s Web site indicates it has about 120 employees. A company spokesperson didn’t confirm the extent of layoffs, but said that the decision was difficult for the firm to make and, “We are confident that our sharpened product focus will help us deliver a truly game changing consumer product.”
The firm was Rubin’s first startup after leaving Google in 2014, which had acquired his co-founded firm, Android, in 2005.
Essential’s first phone came out in August 2017, a few weeks later than initially promised. It received mixed reviews, with most critics citing its lower quality and missing features relative to competing smartphones, such as a lack of waterproofing and poor resiliency to damage. The company dropped the price from an initial $699 within weeks to $499, and offered it on Black Monday in November 2017 for $399.
Analyst reports showed the company sold just 5,000 units in the first two weeks of sales, and 88,000 in the first six months. By comparison, over 400 million other smartphones sold in just the last three months of 2017.
The company canceled production of its second smartphone model in May 2018, and shifted to work on other hardware, reportedly including smart speakers. At the time, Rubin said that his company had “multiple products in development,” including mobile and home hardware. The company had a valuation of nearly $1 billion in 2017, and was seeking additional financing earlier this year. It may have been or may remain up for sale. The company didn’t deny reports at the time, and hasn’t provided more detail on its plans since.
Rubin took a short leave of absence from Essential in late 2017 after the tech news site The Information reported on a complaint lodged against him at Google in 2014 that alleged he engaged in a relationship with a subordinate. Rubin said the relationship was consensual and didn’t involve someone who reported to him.