GoPro’s misstep with Hero4 Session pricing leads to job losses

GoPro Hero 4 session hands on lens
Bill Roberson/Digital Trends

Perhaps GoPro isn’t quite as robust as the cameras it sells. On Wednesday, the California company forecast disappointing sales figures for the final quarter of 2015 and said that as a result it’d be laying off 7 percent of its workforce, equal to about 100 jobs.

The action-camera maker had been hoping its latest device, the diminutive Hero4 Session that launched last summer, would prove a hit with consumers over the holiday period. But the $399 launch price proved prohibitive, forcing the company into not one but two price cuts, first to $299 and then in early December to $199. For many potential customers it seems to have been a case of too-little-too-late.

The misstep clearly hit GoPro hard. CEO Nick Woodman said as much in an email to Re/code this week, in which he admitted the company “clearly made a mistake” with the Session’s initial pricing. However, Woodman added, “I’m proud of how we responded. We recognized the problem, price adjusted to $299….recognized that wasn’t enough and price adjusted again to $199 which positioned Session as the best entry-level product we’ve ever made.”

In a statement released Wednesday, the company said that during the opening months of this year it expects to spend approximately $5 million to $10 million on restructuring, though most of that will be on severance costs.

It also forecast fourth-quarter revenue to reach $435 million, down from its October estimate, which put the figure at $500 million to $550 million. Official results for the quarter will be released on February 3.

Recognizing more than ever the need to diversify its business, GoPro is developing a consumer drone that it hopes to get on the market some time this year. So far we’ve only been told the name of its flying machine – the Karma – and shown some of the footage from its on-board camera, which looked, as you’d expect coming from GoPro, pretty darn good.

With all that we know now, 2016 looks set to be a real make-or-break year for GoPro.