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GoPro Cuts 15% of Workforce and Shut down Entertainment Division

Gary2016.12.02 8:08106

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“GoPro plans to cut 15% of Workforce and shut down its Entertainment Division”

GoPro Inc., the manufacturer of wearable action camera, announced on Wednesday that it will cut off hundreds of jobs to hold down costs. The company’s chief financial office, Brian T. McGee, said in a webcast that, as a part of reconstruction plan, GoPro would lay off about 15 percent of its workforce (nearly two hundreds full-time positions), cut back on its use of contractors and shut down its entertainment unit.

The company is trying to reduce operating expenses throught multiple moves to about $650 million. The reductions are in an effort to make the struggling camera maker return to profitability next year. Mr. McGee said these steps should “yield some income leverage” in 2017. The layoffs is estimated to cost between $24 million and $33 million.

GoPro announced that the camera unit sales in the week of Black Friday increased 35% year-over-year at leading U.S. retailers, and the year-over-year sales at GoPro.com were up about 33% year-over-year. HERO5 Black has said to be the best-selling digital imaging device in the U.S since its launch on October 2. GoPro founder and CEO Nicholas Woodman believed that the latest generation of action camera with many new features was well-received by consumers.

Besides, the company also said the its president Tony Bates would step down at the end of this year. “In the past three years, GoPro has seen enormous progress in camera technology, software and international growth,” said Tony Bates, “Today GoPro has a solid leadership team deeply focused on its core business and profitability.”

GoPro went through a significant sales decline and large-than-expected net loss for the third quarter. Its Karma drone was launched in September but soon recalled for a performance issue related to power loss. According to the statement, cameras and drones will be the main product lines in the company’s future development. “Consumer demand for GoPro is solid and we’ve sharply narrowed our focus to concentrate on our core business,” said Nicholas Woodman. “We are headed into 2017 with a powerful global brand, our best ever products, and a clear roadmap for restored growth and profitability in 2017.”

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