Technology

GoPro Refocuses on Core Camera Business

The action-camera maker is cutting 15% of its workforce and closing its entertainment division as it attempts to return to profitability.
Matthew HellerNovember 30, 2016
GoPro Refocuses on Core Camera Business

GoPro is streamlining its operations as it attempts to return to profitability, announcing Wednesday it would cut 15% of its workforce and close its entertainment division.

The wearable action-camera maker said its cost-cutting moves would reduce 2017 adjusted operating expenses to approximately $650 million and achieve its goal of returning to profitability in 2017. It has lost money for the past four quarters and, through the first three quarters of 2016, logged $596 million in adjusted operating expenses.

The workforce will be reduced by eliminating more than 200 full-time positions and canceling open positions. GoPro employed about 1,500 people at the end of 2015.

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The restructuring “appears to spell the end of the struggling company’s ambitions to branch out beyond device sales into the entertainment biz, which had included plans to produce original shows,” Variety said.

The GoPro entertainment unit has been led by Ocean MacAdams, who previously held programming posts at MTV, Warner Music Group, and the Madison Square Garden Co. The division at one point had about 200 staffers.

“Consumer demand for GoPro is solid and we’ve sharply narrowed our focus to concentrate on our core business,” GoPro CEO Nick Woodman said in a statement. “We are headed into 2017 with a powerful global brand, our best ever products, and a clear road map for restored growth and profitability.”

The company said its Black Friday sales were up more than 35% from a year ago.

As Reuters reports, GoPro went public in 2014 amid investor enthusiasm that its “focus on social media would make it stand out among other makers of consumer electronics.” But sales of its helmet- and body-mounted cameras have slumped amid competition from cheaper rivals.

GoPro’s shares have fallen about 60% since the market debut, including a 45% drop this year. In trading Wednesday, the stock was up 2.6%, at $10.09.

“The moves announced Wednesday reveal the challenge GoPro has faced in branching out beyond its base of adventure-seeking customers — particularly as do-it-all smartphones from Apple Inc. and Samsung Electronics Co. dampen demand for standalone cameras,” The Wall Street Journal said.