GoPro Shares Jump on News of More Job Cuts

The wearable action-camera maker plans to eliminate 270 positions, the third reduction to its workforce since the beginning of 2016.
Matthew HellerMarch 16, 2017
GoPro Shares Jump on News of More Job Cuts

GoPro shares jumped nearly 16% on Thursday after the wearable action-camera maker announced another round of job cuts and projected first-quarter revenue on the high end of its guidance.

In the third reduction to its workforce since the beginning of 2016, GoPro plans to eliminate approximately 270 positions. The company has been streamlining its operations as it attempts to return to profitability.

During the crucial holiday quarter, GoPro’s revenue slid 5.7% versus a year earlier to $540.6 million, but the company said Thursday it expects first-quarter revenue to be in the upper end of its previously announced $190-210 million range.

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“We currently have no need to draw on our credit facility and we expect to be EBITDA positive for full-year 2017,” CFO Brian McGee said in a news release.

In trading Thursday, GoPro shares rose 15.8% to $8.51 but the stock hit an all-time low earlier this week and is still worth about half of where it was at its 52-week high.

As The Verge reports, the company “operated at a loss of $373 million in 2016, in part thanks to production delays on the new Hero 5 cameras and the recall of the Karma drone.” Last week, Goldman Sachs downgraded the stock to sell, citing saturation in GoPro’s core camera market.

After laying off 7% of its workforce in January 2016, GoPro cut another 15 percent of its employees in November and completely shuttered its entertainment division to focus on the camera business.

GoPro executives, on a brief conference call with analysts, said the latest job cuts were a result of a thorough review of all its business operations and procedures.

“We are confident that we are not making those trade-offs,” Chief Operating Officer Charles “C.J.” Prober said when asked whether the additional job cuts would affect new product development. “By being more focused we feel we are improving our efficiency and doing fewer things, better.”

GoPro CEO Nick Woodman said in February that new Hero 6 cameras are in the works for later this year.