It's a day of tough news at GoPro. In addition to confirming a report from late last week that the company would be cutting between 200 and 300 jobs (the actual number is at least 255), GoPro's Preliminary Fourth Quarter 2017 Results release included several other cost cutting announcements, including: a price cut for the GoPro Hero6 Black to spur sales, CEO Nick Woodman reducing his own cash compensation to $1 for 2018, and the big one, GoPro will no longer make drones.
That last point is the most significant news, although not entirely surprising. GoPro's Karma drone struggled to gain traction as DJI released drone-after-impressive-drone to compete with it, and Karma itself suffered a major recall after user reports came in that the drones were literally falling out of the sky during regular use.
In all, there are four major cuts coming in 2018, which GoPro estimates will save it $80 million in operating expenses:
- GoPro's global workforce will be reduced from 1,254 employees as of September 30, 2017 to fewer than 1,000 employees worldwide.
- GoPro founder and CEO Nicholas Woodman will reduce his 2018 cash compensation to $1.
- GoPro will exit the drone market after selling its remaining Karma inventory. GoPro will continue to provide service and support to Karma customers.
- GoPro has lowered the price of its premium model, the HERO6 Black, from $499 to $399 as of January 7th.
Regarding its exit from the drone market, GoPro blames "margin challenges in an extremely competitive aerial market" and "a hostile regulatory environment in Europe and the United States" that the company believes will make the aerial market "untenable."
"GoPro is committed to turning our business around in 2018," said CEO Nicholas Woodman in the release. "We entered the new year with strong sell-through and are excited with our hardware and software roadmap. We expect that going forward, our roadmap coupled with a lower operating expense model will enable GoPro to return to profitability and growth in the second half of 2018."
To learn more about GoPro's business plans going forward, or if you want to dive into the company's Q4 2017 financial results, read the full release below or visit the GoPro investor website.