GoPro cuts 20% of jobs, exits drone division as CEO takes pay cut to $1 salary
GoPro Inc. said it’s cutting more than 20 percent of its global workforce and putting an end to its drone business after a disappointing fourth quarter.
The company said it now expects sales of about $340 million, well short of its own previous projection of as much as $480 million and the average analyst estimate of $472 million. Revenue took an $80 million hit due to discounting for its Karma drones, as well as its Hero line of cameras, over the holiday season, the company said.
In December, GoPro started lowering prices for its older Hero5 Black cameras due to soft demand, despite the company spending significantly on marketing the product, Chief Executive Officer Nicholas Woodman said in a statement. On Sunday, GoPro also cut the price of its newest Hero camera by $100 to $399.
“There’s only so much market for a $500 standalone camera, so that they cut the Hero6 Black camera price is not a surprise,” said Longbow Research analyst Joe Wittine in an interview. “That they cut it three months after the launch though does illustrate that the action camera market is a difficult market right now.” He downgraded GoPro to a neutral rating Monday.
The stock fell as much as 33 percent to $5.04, its biggest ever drop and its lowest price since going public in 2014.
GoPro has faced intensifying competition in the action camera market, as big tech companies from Samsung Electronics Co. Ltd. to Alphabet Inc.’s Google have started selling similar products. Some analysts have said that the Hero cameras have become a commodity, and that GoPro’s main selling point now is its brand. In November, Raymond James analyst Tavis McCourt wrote that there hasn’t been a noticeable bump from GoPro’s newest camera in the Hero line, and it’s turning up less in searches and app […]