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GoPro Job Cuts, Drone Exit Planned

GoPro Job Cuts, Drone Exit Planned

Photo of DJI Phantom 2 quadrocopter drone with GoPro Hero3+ black attached to gimbal. (Agaliza/Dreamstime.com)

By    |   Tuesday, 09 January 2018 11:32 AM

GoPro is planning massive job cuts and will be exiting the drone business completely in an effort to manage its rocky financial situation.

The company revealed this Monday, stating that the challenges of turning a profit in the market have led it to take drastic measures including laying off nearly 300 employees, reducing CEO Nicholas Woodman's pay and withdrawing from the aerial market entirely, The Verge reported.

In 2016 GoPro unveiled the Karma drone, but months later had to recall the units after a manufacturing fault resulted in the device losing power.

The company lost $373 million that year for the Karma drone alone, and now a drop in prices for its other models has resulted in GoPro paying back $80 million through its "price protection" policy, by which the company pays retailers whenever items' pricing drops below the suggested retail price, the Financial Times reported.

The company has readjusted its expected sales from $480 million to about $340 million, and the job cuts and restructuring will result in an estimated charge of $23 million to $33 million, according to Bloomberg.

Digital Trends reported that GoPro was looking at reducing operating expenses by $80 million in 2018.

It will discontinue the Karma drone and will be lowering the price of the Hero6 Black to $400, having already recently reduced prices on the Hero5 Black and Hero5 Session during the holiday period.

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier," said CEO Nick Woodman, according to Digital Trends.

"Our December 10 holiday price reduction provided a sharp increase in sell-through."

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GoPro reportedly will exit the drone business and cut hundreds of jobs in an effort to manage its rocky financial situation.
gopro, job, cuts, drones
Tuesday, 09 January 2018 11:32 AM
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