GoPro cut 15% of workforce in a bid to return to profit
GoPro restructuring effort will see 200 job losses and the closure of the entertainment division
GoPro has announced it will be cutting up to 200 jobs, almost 15% of its global workforce, in an effort to restructure and return to profits, according to a statement released on Wednesday.
The US tech firm, which develops robust action-cameras and video editing software, believes the cuts will reduce 2017 expenditure to $650 million and put the firm into profit, although restructuring costs are likely to reach $33 million.
Company president Tony Bates, who joined the company in 2014, will step down from his position by the end of 2016.
"My time at GoPro has been an incredible experience," said Bates in a statement. "In the past three years, GoPro has seen enormous progress in camera technology, software and international growth. Today GoPro has a solid leadership team deeply focused on its core business and profitability."
The company's entertainment division will also be closed, which was responsible for creating a media business built around GoPro videos online.
"Consumer demand for GoPro is solid and we've sharply narrowed our focus to concentrate on our core business," said CEO Nicholas Woodman. "We are headed into 2017 with a powerful global brand, our best ever products, and a clear roadmap for restored growth and profitability in 2017."
GoPro sales were bolstered over the Black Friday period, with sales up more than 35% year-over-year in the US. Cyber Monday also saw unit sales rise 33% higher than this time last year.
The company put faith in their latest cube shaped Hero5 camera and Karma drone to help generate profits, but so far the products have failed to spark enough interest to reach expectations. As smartphone cameras are becoming increasingly more durable and able to handle the rugged outdoors, GoPro has struggled to convince customers to buy their products, which are some of the most expensive cameras on the market.
Earlier in the month GoPro suffered another blow when reports of power failures forced the recall of over 2,500 Karma drones, sending share prices down 8%. The firm also faces a class action lawsuit over misleading advertising, which allegedly over-stated the capabilities of the drone.
Today's announcement has helped soothe investor confidence, boosting shares by 4.5% to $10.27. However the firm faces strong competition from the likes of Snapchat, which recently launched their own set of glasses that offer video recording and social media integration.
The case for a marketing content hub
Transform your digital marketing to deliver customer expectationsDownload now
Fast, flexible and compliant e-signatures for global businesses
Be at the forefront of digital transformation with electronic signaturesDownload now
Why CEOS should care about the move to SAP S/4HANA
And how they can accelerate business valueDownload now
IT faces new security challenges in the wake of COVID-19
Beat the crisis by learning how to secure your networkDownload now