Nest faced serious problems due to weak sales and employee discontent

Yesterday, the founder of Dropcam, Greg Duffy, who was absorbed by Nest last year, published a statement criticizing the latter, telling about not very impressive incomes and management problems. A day later, unofficial data on Nest revenues over the past year appeared in the network, which amounted to $ 340 million - a good indicator for a company that is producing devices on a completely new market for consumers. But these results were below the internal forecasts of Google, which acquired Nest for $ 3.2 billion in 2014.

As a result, Nest may face serious problems within Alphabet - in 2014, Google’s takeover was one of the largest acquisitions in the history of the company. At that time, it was assumed that Nest would be able to compete with Apple in the growing market of smart devices, and Tony Fadell, who had previously worked for Apple, would be able to bring some of Apple's approach to the development of new devices to Google. Now it became obvious that this idea completely failed.
')
From a financial point of view, Nest is also experiencing an unsuccessful situation - in 2013, during the takeover, Tony Fadell approved with Google the receipt of the operating budget, as well as a separate fund, which ensured that key employees did not leave the company. The budget for Nest was calculated for the next three years and amounted to approximately $ 500 million. If Alphabet does not continue financing by the end of this year, the budget of Nest may end earlier this year.

Along with this, at the end of the year, the date of the possibility of selling stakes in Nest's key employees is suitable, and Nest’s revenues could not exceed $ 300 million. More precisely, the company could only do this after absorbing Dropcam for $ 555 million

But even after that, the situation at Nest remained ambiguous - several co-founders left the Dropcam team, and Greg Duffy openly spoke out against Tony Fadell. If we consider the imminent crisis within the company, then we should expect a wave of dismissals from Nest at the end of this year. Moreover, even sales of Dropcam, which accounts for most of the revenue, according to Greg Duffy, began to decline after the rebranding, which Nest conducted.