Business

GoPro Cuts Hundreds of Jobs, Stock Falls 25 Percent

GoPro Cuts Hundreds of Jobs, Stock Falls 25 Percent

GoPro pioneered the point-of-view action camera and developing drones to carry its compact video cams seemed a flawless fit for its business model. Now, the company says that it will focus on innovations in the core product lines. Unfortunately, the drone was eventually recalled in November of the same year, as some of the units lost power, during operations and fell from the sky.

The company will achieve this lower operating expense level by; reducing its global workforce from 1'254 employees as of September 30, 2017 to fewer than 1'000 employees worldwide. Founder and CEO Nick Woodman said he'll be slashing his cash compensation to $1 while the San Mateo, Calif. -based company gets its house in order.

The disappointing outlook sent shares plummeting almost 30 percent to an all-time low of $5.32 in morning trading Monday.

Woodman cited soft sales for Hero5 Black as the primary pain point but noted that pricing slashes improved business.

GoPro's decision to exit the drone business was driven by what the company views as a "hostile regulatory environment in Europe and the United States" that will make the aerial make "untenable" going forward.

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GoPro's reasoning behind the departure stems from what they are calling an "extremely competitive" drone market.

GoPro's stock saw a spike in downside bets amid the negative news, with traders initiating almost 1.5 million of new short sales. But it wasn't enough and the Karma is now part of the company's other cost-cutting measures.

Regarding the former, GoPro on Monday morning announced that it now expects fourth-quarter revenue to arrive at roughly $340 million - significantly below its latest guidance for sales in the range $460 million to $480 million.

More details regarding GoPro's financials will be shared in the final fourth quarter report scheduled to arrive early next month.

GoPro today released preliminary fourth quarter 2017 results which paints the company in struggling situation.


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