GoPro cuts 20 percent of jobs, exits drone business on lower revenue

GoPro cuts 20 percent of jobs, exits drone business on lower revenue

GoPro CEO Nick Woodman announced the company will no longer make drones, drawing a line under its Karma, which failed to recover from a recall past year after units were reported to fall from the sky.

In a day of dramatic developments for the action camera maker, GoPro has announced it is leaving the drone market and its CEO has effectively put the company up for sale.

The comments followed reports by several media outlets, including Reuters, that GoPro had hired JP Morgan to help it with a sale process, as the one-time Wall Street favourite battles falling demand for its sports cameras and drones.

"It is our responsibility to scale the business, so if the right opportunity presented itself, it's something we would consider", it added. GoPro said low margins and a hostile regulatory market in Europe and the USA makes the drone market "untenable".

The Nasdaq-listed tech firm, which is known for durable miniature cameras suitable for filming outdoor activities, reported a drop in sales yesterday and said it planned to cut its workforce.

Morgan Stanley said in a research note yesterday that the price cut would make earnings growth hard in fiscal 2018. It will exit the market after selling its remaining inventory and continue to service existing drones. The company said it expects revenue of about $340 million for the fourth quarter after projecting $470 million for the quarter in November. The company has 1,254 employees as of September 30, 2017, which will be reduced to "fewer than 1,000". The job cuts and business restructuring will result in an estimated charge of $23 to $33 million, most of which will be recognized in the first quarter, the company said. It's also reducing CEO Nicholas Woodman's pay to $1 as it flounders with its less than stellar numbers.

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