GoPro exits the drone business, confirms job cuts

Shawn Knight

Posts: 13,080   +131
Staff member

Word slipped out late last week that GoPro was reducing its workforce by as many as 300 employees. The cuts, said to largely impact the company’s Karma drone division, were to be kept under wraps until mid-February – you know, well after CES.

Well, that didn’t happen and now, GoPro is coming clean about the debacle.

GoPro on Monday in a preliminary fourth quarter 2017 report said it is reducing its global workforce from 1,254 employees to fewer than 1,000 employees worldwide. What’s more, as part of a “sharper focus” that will enable the company to save $80 million in operating expenses this year, CEO Nick Woodman will see his 2018 cash compensation reduced down to just $1.

Additionally, GoPro said it was pulling out of the aerial drone market despite its Karma drone reaching the #2 market position at its price point in 2017.

The company cited a hostile regulatory environment in the US and Europe as well as an extremely competitive market as reasons for its departure. GoPro will sell its remaining Karma drone inventory and continue to provide service and support to existing owners but once the current inventory is gone, it’ll be game over for the aerial division.

GoPro said the restructuring will set the company back between $23 million and $33 million, much of which will be cash expenditures to cover severance and related costs.

GoPro's stock took a beating in early morning trading and is currently down nearly 25 percent on the day.

More details regarding GoPro’s financials will be shared in the final fourth quarter report scheduled to arrive early next month.

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yRaz

Posts: 3,606   +3,527
GoPro's mistakes were getting rid of their budget action cams because they wanted to make more money on their higher end models. Not everyone is looking for a 4k30/60 action cam. Their 720p30 models were great for things like hitting with a golf club to see what it's like to be a golf club. The fact that their go pros were so cheap they were basically disposable was the entire reason people bought them. What GoPro didn't realize is that their bottom live was made up of people who don't want one $400 camera, they want 5 or 6 $60-70 cameras. The GoPro market is made up of people who want to do cool stuff and not have to worry about breaking equipment while they're doing it.

Now GoPro has opened up the market for other companies to release cheap action cams. GoPro has become the "Klenex" or "Xerox" of action cams. Their target market was never of the brand loyal variety.
 

mbrowne5061

Posts: 1,808   +1,040
GoPro's mistakes were getting rid of their budget action cams because they wanted to make more money on their higher end models. Not everyone is looking for a 4k30/60 action cam. Their 720p30 models were great for things like hitting with a golf club to see what it's like to be a golf club. The fact that their go pros were so cheap they were basically disposable was the entire reason people bought them. What GoPro didn't realize is that their bottom live was made up of people who don't want one $400 camera, they want 5 or 6 $60-70 cameras. The GoPro market is made up of people who want to do cool stuff and not have to worry about breaking equipment while they're doing it.

Now GoPro has opened up the market for other companies to release cheap action cams. GoPro has become the "Klenex" or "Xerox" of action cams. Their target market was never of the brand loyal variety.

I largely agree with you - I miss the cheap cameras, and the Session isn'tquite cheap enough. The reason they started chasing the $500 market segment was that television show producers discovered GoPro and wanted the increased resolution and framerate. For $500, 4k60fps is a steal. Yeah, you'll still get better image, with better color out of a 'real' camera, but the GoPro's size made it ideal for all those 'out in the woods' shows that are now on the Discovery networks, or for sticking it up in the corner of a room on the set on one of those 'dramatic people cause each other headaches' shows. If it gets broken, no big deal: $500 is a 'battery' on some of the high-end cameras they would be using otherwise.

GoPro will never die, but whether they stay in the consumer market remains to be seen.