GoPro CEO Nick Woodman (Photo: Josh Edelson/AFP/Getty Images)
The leaders at embattled camera maker GoPro may have been hoping for a fresh start at the beginning of the year. The company's 2017, however, has picked up right where its 2016 left off.
On Wednesday, GoPro announced it would cut 270 more positions, in addition to the 200 it said it would eliminate in November. Some people in satellite offices had already been informed of their terminations on Tuesday, according to former GoPro employees who declined to be named, while others at the company's San Mateo, California headquarters were being notified on Wednesday.
The latest round of departures further underscore the turmoil at GoPro, a company that has dealt with recalled products, missed projections and numerous other missteps since its initial public offering in June 2014. Once a high-flying startup that pioneered the action camera market, GoPro and its CEO Nick Woodman have fallen on hard times, unable to develop new businesses or popular products to complement their cameras. As a result, the stock was trading at its lowest point ever this week--down more than 40% in the last 12 months to under $7.50 per share--with investors souring on the company's potential to innovate beyond their core set of consumer electronics.
"We're determined that GoPro's financial performance match the strength of our products and brand," said Woodman in a statement, which sent the stock up nearly 8% in after-hours trading. "Importantly, expense reduction preserve our product roadmap and we are tracking to full-year non-GAAP profitability in 2017."
In its last quarter of 2016, the company lost $116 million, or 82 cents per share, due to production delays on its Hero5 camera and the recall of its flagship drone, Karma. The cuts will allow GoPro to reduce operating expenses without sacrificing future products, the company said.
Since the end of 2016, GoPro has been trying to do everything to resuscitate itself. Along with the announced layoffs in November 2016, Woodman has put on an apologetic face in public appearances, admitting mistakes with the company's foray into entertainment and highlighting the renewed focus on its core business of making action cameras.
“We’re guilty of having reached too far and we stumbled," Woodman said in an on-stage interview at the Consumer Electronics Show in January. "We’ve decided to return back to that very focused business that does just a few things extremely well, instead of doing too many things marginally."
Insiders say that GoPro is now mainly concerned with its action cameras and drone, Karma, which has had little success despite the large amounts of resources and money the company spent on the endeavor. Karma launched in September but was recalled during the holiday season after users found that some devices would fall out of the air mid-flight. GoPro recently re-released the four-propeller robot, though reviews have been lukewarm and competition in the space has been fierce from incumbents like DJI.
Retrenchment has meant that the company's other divisions have been or will be gutted. While GoPro said in November that it would close its entertainment division, it did not specficically disclose layoffs on its mobile editing software team whose members were brought in through the combined $105 million acquisition of the companies behind Replay and Splice, two video editing applications that allowed users cut footage on their smartphones. That team had members in Austin and Paris.
"This was a global action," said GoPro spokesperson Jeff Brown. "Some positions in [European markets] are under consultation and will be resolved at a later date."
Brown declined to address what particular teams would be affected by the new layoffs.
GoPro made, and will continue to make, significant cuts to its virtual reality effort and its technology for professional broadcasters, said one source, noting that "no one is left" to oversee those efforts. Also gone are a number of executives that have been removed from the company's corporate governance page including its senior vice president of marketing, senior vice president of operations, vice president of corporate development and vice president of entertainment. Forbes had reported earlier that the senior vice president of consumer devices, Fabrice Barbier, who was responsible for the product development of cameras and Karma, had been removed. The company had previously said that roughly a third of positions at the vice president level or above were eliminated last quarter.
The latest round of cuts will be felt across all divisions including public relations, marketing and sales. Multiple sources confirmed that the company's desktop video editing software team, which was based in Carlsbad, California, was laid off on Tuesday, while about half of GoPro's 30-person media team would be leaving. One person in a closed Facebook group of GoPro alumni posted on Tuesday that there were rumblings of new layoffs.