It was a rough year for GoPro, but today it became clear how rough — the venerable action cam maker said it is cutting more than 250 staffers worldwide and will duck out of the “untenable” aerial vehicle market after selling off its remaining stock of Karma drones. The job cuts will bring GoPro’s workforce down from 1,254 employees as of September 20, 2017, to fewer than 1,000, the company said.
Among those let go this week are the company’s COO, Charles “CH” Prober and its SVP, Corporate and Business Development, General Counsel and Secretary Sharon Zezima. Both departures were announced in a filing today with the SEC.
Moreover, CNBC is reporting that the company is up for sale, with J.P. Morgan working to find a potential buyer.
As recently as November 1, GoPro had been guiding investors to expect revenue of $470 million in the fourth quarter, but now it says the figure will be “approximately $340 million.” Business was slow enough that GoPro put about $80 million toward December price cuts to goose sales, including $100 off the Hero5 Black and $200 off the Karma. This week, it did the same for its flagship Hero6 Black camera, which now sells for $399, down from $499.
Was there a bright spot for GoPro in the fourth quarter? Just one — the company’s new $699 spherical Fusion camera, which began shipping in November, enjoyed better-than-expected sales, the company said.
“GoPro is committed to turning our business around in 2018,” said CEO Nicholas Woodman, who now plans to take cash compensation of $1 in 2018, in a prepared statement. “We entered the new year with strong sell-through and are excited with our hardware and software roadmap. We expect that going forward, our roadmap coupled with a lower operating expense model will enable GoPro to return to profitability and growth in the second half of 2018.”
GoPro said thanks but no thanks to the drone market after margins on the Karma proved to be slim despite the UAV reaching what GoPro described as “the #2 market position in its price band” last year. That success came after a rocky post-launch period, when GoPro had to recall the product to fix a widespread malfunction. The company blamed its ultimate decision to exit the market on heavy competition as well as “a hostile regulatory environment in Europe and the United States,” but promised continued service and support for existing Karma customers.