GoPro cuts 20 percent of jobs, exits drone business on lower revenue

GoPro CEO says he'd consider a sale, but is still planning to be independent

Though GoPro is clearly done producing the Karma drone, it says it intends to continue to provide service and support to Karma customers.

GoPro 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. Hostile regulatory environment in Europe and the United States has also weighed upon its decision. Woodman had already told CNBC earlier in the day that he would be willing to consider opportunities "to unite with a bigger parent company to scale GoPro even bigger [.]". The San Mateo, California-based company has also faced intensifying competition in the action-camera market, as big tech companies from Samsung Electronics Co.to Alphabet Inc.'s Google have started selling similar products.

GoPro is now also facing financial trouble, with the company laying off staff and reducing the salary of CEO Nicholas Woodman, to $1.


The Karma drone was meant to be GoPro's next big product when it launched amid much fanfare in 2016. The company's shares, which earlier dropped as much as 33 percent, pared some losses after the report, declining 11 percent to $6.67 at 1:55 p.m.in NY. Only a few weeks after its release, GoPro issued a mass recall of 2,500 units because faulty engineering caused the drones to lose power mid-flight and drop out of the sky. In the months that GoPro was dealing with the, uh, fallout from the Karma's problems, DJI released two new smaller and cheaper drones that essentially made the Karma obsolete.

The company now expects fourth-quarter revenue of US$340 million, compared with its November projection of US$470 million, plus or minus US$10 million. GoPro's hiring of JPMorgan was reported earlier by CNBC. "There's significant demand for GoPro at the right price", Woodman said.

The company was already forced to announce a price cut on December 10 for its core camera product, the HERO5, due to weak pre-holiday sales.

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