GoPro Lays Off 250+ Employees and Will Exit the Drone Market
In a press release announcing their less-than-stellar preliminary Fourth Quarter 2017 financial results, GoPro states that they are implementing the following changes:
- GoPro is reducing its global workforce from 1,254 employees as of September 30, 2017 to fewer than 1,000 employees worldwide.
- GoPro founder and CEO Nicholas Woodman will reduce his 2018 cash compensation to $1.
- Although Karma reached the #2 market position in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market. Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead. These factors make the aerial market untenable and GoPro will exit the market after selling its remaining Karma inventory. GoPro will continue to provide service and support to Karma customers.
The changes are, in part, a result of soft demand for the HERO5 Black camera at the original price. Recall issues and stiff competition with the Karma drone couldn't have helped either.
On January 7, GoPro lowered the price of the recently released HERO6 Black from $499 to $399.
Shares of GoPro stock fell 30 percent early on Monday, January 8 and have since rebounded a little. "GoPro is committed to turning our business around in 2018," said Woodman.