Habitat fragmentation relates to biodiversity loss primarily through habitat destruction and its implications.
Habitat fragmentation requires some degree of habitat destruction. Although habitat fragmentation certainly differs from total habitat destruction there is effectively less land for biodiversity to thrive after a habitat has been fragmented. This results in since there is less of a habitat for organisms to thrive in.
After habitats are fragmented each fragment of the once continuous habitat can only support a fraction of the population that the whole habitat could. Often especially when species are incapable of crossing whatever obstacle fragmented the habitat this lower carrying capacity causes many organisms to die as the fragmented habitat transitions into its reduced carrying capacity.
Additionally when populations are thus isolated and reduced the lack of genetic diversity makes these populations more vulnerable to disease. Consequently habitat fragmentation leads to a reduction in biodiversity.