GoPro announces layoffs and end of drone business

A Go Pro Hero 3+ camera is seen at the Nasdaq Market Site before before Go Pro Inc's IPO in New York City

A Go Pro Hero 3+ camera is seen at the Nasdaq Market Site before before Go Pro Inc's IPO in New York City

Near 2010 GMT, shares of GoPro were down 13.5 percent at $6.52 after falling as low as $5.04 earlier in the session.

That didn't last long: Camera maker GoPro announced Monday that it is exiting the drone business, killing off its Karma drone product after selling off all remaining inventory, and laying off 250 employees in the process. As a result, GoPro will reduce operating expenses by $80 million over the previous year.

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. Fourth quarter revenue includes a negative impact of approximately Dollars 80 million for price protection on HERO6 Black, HERO5 Black and HERO5 Session cameras, as well as the Karma drone.

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier", said Woodman, adding that the company "is committed to turning our business around in 2018".

Short-sellers had raked in $45.4 million in mark-to-market profits before the report that the company may be trying to find a buyer.

Morgan Stanley said in a research note earlier Monday that the price cut for the Hero6 camera would make earnings growth hard in fiscal 2018. CEO Nick Woodman, speaking to CNBC, commented on the company's plans: "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".

In a particularly surprising move, it also announced that it would be exiting the drone business.

GoPro's move into the drone market is coming to an end. We're now hearing that the company could be trying to sell itself, but would anyone buy GoPro in its current state? The company undeniably makes the best action camera on the market and has a meaningful brand, but has so far been unable to make anything out of the two.

Latest News