GoPro wasted little time Monday confirming what many had expected about the sport-camera maker, and said it will slash its workforce and admitting that its effort to get into the drone business was a flop.
Before U.S. stock markets opened, GoPro said it will cut at least 20 percent of its workforce, and go from 1,254 employees to less than 1,000 workers. Chief Executive Nick Woodman also said he would cut his cash compensation for 2018 to $1.
Additionally, GoPro said it is pulling the plug on its Karma drone business after more than a year of false starts, product stumbles and disappointing sales. GoPro said that even though the $800 Karma has reached the No. 2 position in the United States for drones in its “price band,” the company decided the drone market was “untenable” due to “a hostile regulatory environment in Europe and the United States (that) will likely reduce the total addressable market in the years ahead.”
Get tech news in your inbox weekday mornings. Sign up for the free Good Morning Silicon Valley newsletter.
GoPro initially put the Karma on sale in October 2016, but pulled it from the market after multiple reports of technical issues that caused the drones to drop from the sky as they were flying. GoPro put the Karma back on sale in February 2017.
Along with the job cuts and plans to get out of the drone business, GoPro released preliminary fourth-quarter results, which didn’t do anything to inspire investors’ confidence. GoPro said it expects sales for the quarter ending Dec. 31 to be $340 million, a 37 percent decline from the same period a year ago. Wall Street analysts had earlier forecast GoPro to report sales of $472 million for the quarter.
Woodman said GoPro’s results were impacted by several factors, including a reluctance of consumers in November to purchase the company’s Hero5 Black camera at the same price it cost when the camera was launched in late 2016. Woodman said sales did improve somewhat after GoPro cut the price of the Hero5 on Dec. 10.
All the bad news from GoPro slammed the company’s shares Monday, as GoPro’s stock price fell 21 percent to $5.95. GoPro shares are also down by 75 percent from their $24-a-share price when the company went public in June 2014.
Photo: A GoPro Karma drone is seen in this image provided by the company. On Monday, GoPro said it would exit the drone business and cut at least 20 percent of its workforce as the sport-camera maker continues to deal with slumping overall sales.
Tags: drone, GoPro, job cuts, Karma, Layoffs, Nick Woodman