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GoPro cuts staff, considers selling company after weak holiday sales
[NEW YORK] GoPro announced Monday it will cut more than 20 per cent of its staff and signaled it was willing to consider a sale following weak holiday-season sales.
The camera and technology company said it would cut its workforce of 1,254 to fewer than a thousand.
GoPro also plans to exit the drone business and chief Nicholas Woodman will accept a salary of just US$1 this year. The company's share price plummeted amid the disappointing reports.
A source told AFP that GoPro hired JPMorgan Chase to advise it on strategic options, including a possible sale.
Mr Woodman earlier told CNBC that the company expected to remain independent, but would consider a sale.
"If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at," Mr Woodman told CNBC.
"Of course we need to run the business as though we're going to be independent, and we're planning accordingly." GoPro projected fourth-quarter sales of US$340 million, well below the US$474 million expected by analysts.
Midway through the holiday season, GoPro slashed prices on some camera models, which lifted sales but lowered profit margins.
"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier," said Mr Woodman, adding that the company "is committed to turning our business around in 2018." And although GoPro's Karma drone was the number two offering in its price division, the company will exit the "extremely competitive" drone market, it said.
"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," GoPro said.
GoPro will no longer market drones after it sells off remaining inventory, but will continue to provide services and support to Karma customers, it said.
Near 2010 GMT, shares of GoPro were down 13.5 per cent at US$6.52 after falling as low as US$5.04 earlier in the session.