(Pocket-lint) - Pebble is having trouble finding its place in a niche market full of big players, and because of that, about 40 employees are getting the axe.

The smartwatch-maker told TechInsider that it is laying off about 25 per cent of its staff. CEO Eric Migicovsky made it seem like the cuts were happening due to funding issues: "Money is pretty tight these days," he said, indicating fundraising in Silicon Valley hasn't been as fruitful as it was in the past. That being said, Pebble has raised $26 million in the last 8 months.

It also sold $20 million worth of smartwatches via Kickstarter in 2015. Pebble therefore has some money, but it's still choosing to be more careful this year as it plans products. Migicovsky said he wants Pebble to focus on the health and fitness. Pebble watches do include some fitness features, but they pale in comparison to sports wearables and fitness trackers on the market.

Last December, Pebble announced something called Pebble Health. It is, as you might've guessed, a health app. And it features fully native activity tracking with timeline integration. It was developed in collaboration with researchers at Stanford University and builds off the 24/7 step- and sleep-tracking functionality introduced in 2014 via Jawbone or Misfit’s apps.

Pebble likely launched this app to better compete with smartwatches available from major rivals. Apple, for instance, offers a Apple Watch Sports edition, though it dropped the price of that watch by $50, which suggests it isn't selling too well or the market is saturated with like-wearables. FitBit, which primarily makes fitness trackers, has even seen its stock drop quite a bit this year.

With these sorts of things happening in the space, it's interesting to see Pebble consider a move toward health and fitness. We get the feeling it is running out of options though, so it'll be interesting where the company is at next year.

Writing by Elyse Betters.