GoPro has confirmed it will be laying off around 15 percent of its staff and will shut down its entertainment unit. The motivation? To ‘return to profitability’ in the face of declining sales and failed ventures. As times become increasingly tough in the consumer electronics market, a return to core businesses is being seen more and more across the board.
Sales of GoPro action cameras generally have been on the decline in recent times and are being cited as the primary reason 200 full-time jobs have to go. GoPro previously announced a seven percent decrease in its workforce at the start of 2016. The recent recall of the GoPro Karma drone has only made matters worse.
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The recently released HERO5 camera and Karma drone have failed to take off as planned, with the company reducing its full year earning’s estimates in the face of the sales slump. Analysts have likewise reduced their expectations, with some dropping their 2017 forecasts for Karma sales from $150 million down to just $36 million.
GoPro’s President, Tony Bates, will also be stepping down at the end of the year, after a two-year stint at the helm that has failed to generate an upswing in GoPro’s fortunes. Bates previously held an evp position at Microsoft and ceo role at Skype. No successor has yet been named.
GoPro claims the restructuring will reduce its operating expenses enough to return the company to profitability in 2017. Analysts have applauded the decision to focus in on GoPro’s core business and expect the company’s fortunes to improve in the new year.
What are your thoughts on the HERO5 and Karma drone? Will GoPro recover from this hiccup?
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