GoPro Fires 200-300 Employees, Mostly In Its Drone Division
Zacks Investment Research | Jan 07, 2018 09:11PM ET
It seems that GoPro, Inc. (NASDAQ:GPRO) has begun 2018 with a round of layoffs. Per a report by the tech news site — TechCrunch — GoPro has laid off nearly 200-300 workers, largely in its Karma drone business division.
The report refers to an internal letter of the company which noted that the job cuts were necessary "to better align our resources with business requirements." Per the report, the employees were let go last Thursday, but will be kept on the company’s payroll until mid-February, which is when we expect GoPro to announce its next earnings report.
The job cuts underscore GoPro's ongoing struggle to turn around its ailing business after multiple turbulent years. In its efforts to expand beyond the core video camera business, GoPro tried its hand at running a media and entertainment unit, and making drones. However, those efforts failed to yield success, forcing the company to shutter its media business and implement several rounds of layoffs. The company actually fired 370 employees in late 2016 and early 2017.
Investors were particularly hopeful that the Karma drone would boost GoPro's sales, but the initiative encountered snags right from the beginning. The company was forced to pull the Karma off the market within 16 days of its release, after reports surfaced of the drones losing power mid-flight and falling from the sky. Karma was re-released in February 2017.
While GoPro has not made the news about the job cuts or its impact on the company’s Karma drone business public yet, hacking such a workforce could be viewed as a possible retreat from something that was once seen as a great growth avenue.
After several negative quarterly reports and multiple rounds of layoffs, GoPro seemed to be getting back on track, of late. In the company’s third-quarter 2017 results, released in November, GoPro turned in a profit of 15 cents per share on revenues of $329.8 million compared with a loss of 60 cents a share, on $240.6 million in sales reported in the prior-year period.
Nevertheless, investors have been well guarded about putting GoPro back into their investment plans. The company’s shares have lost 17% over the past year, in stark contrast to the Original post
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