GoPro to Leave Drone Market, Cut Jobs

11 January, 2018, 09:17 | Author: Samuel Hayes
  • Gopro, Inc. - GPRO - Stock Price Today - Zacks

To try and right the ship, GoPro is slashing its global workforce from 1,254 employees to fewer than 1,000, a cut of over 250 positions. In November 2016, GoPro eliminated 15 percent of its workforce in an attempt to cut costs and turn the company around financially. Now, the company says that it will focus on innovations in the core product lines.

First announced in December of 2015, action cam company GoPro has pulled the plug on its heavily delayed, disastrous aerial photography drone, best known for its spectacular propensity for falling out of the sky.

"GoPro is committed to turning our business around in 2018", Woodman said in a statement.

After the market digested this news, GoPro's shares plunged to by nearly 30 per cent - to an all-time low of $US5.10 in early morning trade on Monday (New York time). The investment bank was one of the underwriters for GoPro's 2014 initial public offering.

"With that said, if there were any opportunity for GoPro to partner up with a larger organization that could help us scale the company, scale our brand and reach to consumers, then that's certainly something that we would consider".

Management has already hired JPMorgan Chase to facilitate discussions, according to CNBC sources, but whether buyers have yet come forward remains unknown.

More news: Oil tanker collides with vessel off China coast, 32 crew members missing

GoPro is cutting staff and expects a sharp decline in fourth-quarter revenue after facing weak demand for cameras during the holiday season. The company now estimates its fourth-quarter sales at about $340 million, while it previously had been expecting about $480 million in sales.

GoPro also announced that Woodman would reduce his 2018 cash compensation to $1. After $3.96 actual earnings per share reported by Lear Corporation for the previous quarter, Wall Street now forecasts 7.83% EPS growth.

GoPro is exploring a sale after a tumultuous couple of years that included multiple rounds of layoffs, shrinking sales, and a plummeting stock price.

GoPro CEO Nick Woodward said the company may look to "unite with a bigger parent company". Wittine points out a quote that stands out from his conversations is a supply chain contact looking for a year of more challenges lying ahead for GoPro.

Even though GoPro is exiting the drone business, drone makers such as DJI might be interested in the company purely for its cameras, which could be packaged with their drones.

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