GoPro, the company that built its name on action cameras that could be brought along on fun excursions, is in some trouble.
The company on Monday announced plans to cut its workforce by 20% and exit the drone business. The move will bring GoPro’s total workforce to just under 1,000 after at least 250 layoffs are completed. GoPro also said that it will reduce founder and CEO Nick Woodman’s cash compensation to $1 in 2018.
“GoPro is committed to turning our business around in 2018,” Woodman said in a statement. His comments accompanied news that GoPro was forced to cut its fourth-quarter revenue guidance to $340 million after it suffered a “negative impact” to its revenue during the period to the tune of $80 million.
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GoPro’s business is facing adversity from all sides. The company’s core business, action cameras, is facing headwinds due to soft demand. In a bid to address that, GoPro in December slashed the price on its Hero5 Black model and on Sunday, did the same on the Hero6 Black. GoPro said that price cuts have helped attract more customers and suggested that the $100 price cut on the Hero6 Black could also help in the first quarter.
In a statement, GoPro said that it decided to mothball its Karma drone division due to low margins caused by “an extremely competitive aerial market.” The company also cited “a hostile regulatory environment” in both the U.S. and Europe that could cause more problems in the coming years.
Looking ahead, GoPro said that its cost cuts, along with the revised product mix, should help it reach profitability in the second half of the year.
GoPro shares are down 25% to $5.67 in early trading on Monday.
