GoPro is expecting to meet its previous revenue estimates on the high end — but that will come at a cost. GoPro announced on March 15 another 270 layoffs as the struggling action camera company continues restructuring with the goal of returning to profitability in 2017.
The job cuts will be company-wide across several departments, and will mean about $10 million in severance package costs, but further cuts the company’s operating expenses to $585 million under GAAP (Generally Accepted Accounting Principles) or a non-GAAP $495 million. Despite the reduction in the current workforce of about 1,500, the company says the changes will not affect the firm’s schedule for new hardware and software. Earlier this year, CEO Nicholas Woodman confirmed that the company would be launching a Hero6 in 2017, bucking the company’s every-other-year practice.
GoPro has been on a downward trajectory since mid-2015 with its stock price hitting record lows, price cuts to the Hero4, and a recall of the Karma drone, but it announced a restructuring plan late last year with a goal of getting out of the red this year. The latest announcement for layoffs adds to the initial 200 jobs that were cut in November.
With the latest changes, the company expects to be on the high end of their earlier estimates, anticipating revenue of about $190 to $210 million for the first quarter, which would put it on track for returning to profitability this year.
In the midst of the restructuring, GoPro is also putting a new emphasis on software, in contrast to prior practice, when a large majority of programs were the result of acquisitions, not systems developed in-house. That’s likely about to change since the company opened a new office in Romania earlier this month dedicated to software development. The change is expected to add around 100 jobs for the company.
“We’re determined that GoPro’s financial performance match the strength of our products and brand,” Woodman said. “Importantly, expense reductions preserve our product roadmap and we are tracking to full-year non-GAAP profitability in 2017.”
