The Hero Session 4. Engadget photo.
In a press release yesterday, GoPro announced the firing of about 7% of their employees. Over the past two years GoPro's workforce has grown 50% to more than 1,500 employees. The layoff will affect approximately 105 employees as they enter a restructuring period during the first quarter of 2016.
GoPro is hoping that the restructuring effort will help the company align with key growth initiatives. They expect to incur about $5 to $10 million in expenses during this time, most of which will be severance costs.
GoPro had a less than stellar finish to 2015, with revenue approximately $435 million for the fourth quarter. Industry analysts were originally projecting that GoPro's Q4 revenue in 2015 would be as high as $690 million. Sales of the Hero 4 Session, which was reduced in price by $399 to $199, was much lower than expected.
GoPro Inc. stock price over last year. Yahoo finance photo.
Although little is officially known about these "key growth initiatives," you can speculate that GoPro is exploring growth other areas to continue growing at a rate to please investors. GoPro hopes to begin to monetize user-generated content, while also entering the drone market in the next several months and begin to offer virtual reality products.
CEO Nick Woodman–who just bought a 180-foot yacht–has been hinting at the company's first quadcopter drone and the release of a 360-degree camera for consumers in 2016. These markets will be fairly difficult to enter even with the name recognition of GoPro; drone giant DJI already holds a commanding share of the market, with products designed for both the professional and recreational consumer.
After the announcement of disappointing sales and job cuts the companies stock plunged about 18% to $12.55 during early trading this morning. Overall, GoPro's stock has dropped 77% of its value during the past 12 months. On the slightly more positive end, GoPro reported 16% annual revenue growth to $1.6 Billion for 2015.
Read the full press release here.
About The Author
stash member Jonathan Desabris
Digital Content Producer at TGR. Jackson Hole transplant from the Green Mountain State. Contrary to popular belief I have never lived in New Jersey.