Is the Karma about to come crashing to the ground?
That’s one possibility facing San Mateo-based GoPro, after reports that the sport-camera maker is about to shed 200 to 300 jobs from its aerial division, which is the part of GoPro’s business responsible for the Karma drone.
TechCrunch first reported the job cuts, citing a letter sent to employees to be laid off that came from “sources close to the company.” GoPro didn’t immediately respond to a SiliconBeat request for comment.
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The job cuts were said to have been made Thursday, but GoPro is reportedly keeping the affected employees on the company payroll until Feb. 16. GoPro has tied prior layoffs to its quarterly earnings reports and may be holding back an official job cuts announcement until its next earnings report, which would likely be in late January or early February.
GoPro employs about 1,250 people.
While GoPro has yet to make any public mention about the job cuts, or their impact on the company’s Karma drone efforts, slashing such a workforce from its aerial business would be seen as a possible retreat from something that had once held great promise for GoPro.
But Karma hasn’t actually worked out like GoPro had hoped.
The company originally announced plans for the Karma in early 2016, and released the first drones that October. However, GoPro pulled the Karma off the market after just 16 days after numerous reports of the drones losing power and falling from the sky. And at a starting price of $800, customers weren’t too happy about their purchase falling apart as soon as it took to the air. GoPro re-released the Karma in February 2017.
Along with the Karma issues, GoPro spent the better part of two years searching for a new hit product to extend the enthusiasm for its signature line of Hero sport cameras. After multiple negative quarterly reports, and rounds of layoffs, GoPro seemed to be getting back on track. When the company delivered its third-quarter results in November, it turned in a profit, excluding one-time items, of 15 cents a share, on revenue of $329.8 million, compared with a loss of 60 cents a share, on $240.6 million in sales, during the same period in 2016.
However, investors have been cautious about putting GoPro back into their investment frames. The company’s shares have fallen almost 20 percent over the past year, to $7.49 on Friday. That decline looks even worse when compared to GoPro’s June 25, 2014 IPO price of $24 a share, and mind-blowing when put up against GoPro’s all-time high of $98.47 a share, which it reached on Oct. 7, 2014.
Photo: A GoPro drone equipped with a Hero 5 camera. (Courtesy GoPro)
Tags: drone, GoPro, job cuts, Karma, Layoffs