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GoPro axes entertainment division, 200 employees in restructuring

gopro restructures hero5 black review
Les Shu/Digital Trends
GoPro’s year of ups and downs, from releasing a new flagship camera to recalling the firm’s first drone, is prompting the action camera giant to reduce its workforce by more than 200 employees and close its entertainment division. GoPro on Wednesday announced a company-wide restructuring slated for next year, along with the departure of three-year company president, Tony Bates.

The announcement comes on the tail end of a rocky year for the company. GoPro fought a persistently falling stock price with the launch of new features like voice control and image stabilization this fall. The announcement of the Karma drone also gave the company a boost — but that was followed by a costly recall that further impacted the company’s stock price.

The restructure announcement was paired with a spot of good news for the company — holiday sales are up 35 percent so far, likely owing to what many consumers felt was a long overdue update with the GoPro HERO5. That flagship action camera has been the best-selling digital imaging device since its October launch, according to the NPD Group.

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

That road map includes closing GoPro’s entertainment division, which promotes GoPro-crafted videos through a rewards system and streams user videos on multiple platforms. The entertainment division was a recent development by the company, born from an idea to build on the sales that already resulted from viral GoPro-shot videos and stories of the cameras surviving odd conditions. The rewards program celebrated it’s first full year — and a million dollars in award payments — only a month ago.

The company’s staff will be cut by 15 percent, which includes about 200 current full time employees as well as canceling open positions. The company says reductions will also be made in the company’s physical facilities.

The move will bring the company’s operating expenses down from about $735 million to $650 million, but will also cost the company between $24 and $33 million, with most of those costs to be incurred before the end of this year. The company says a large portion of those costs are severance packages.

GoPro’s president, Tony Bates, will also be stepping down at the end of the year. “In the past three years, GoPro has seen enormous progress in camera technology, software and international growth,” he said. “Today GoPro has a solid leadership team deeply focused on its core business and profitability.”

GoPro essentially began selling waterproof camcorders in surf shops but quickly grew into a dominate player in the market, arguably creating the action camera category. Now, the company is facing more competition from brands like Garmin, Sony, and even the budget manufacturer Yi Technology. Prior to the release of the GoPro Hero 5, many considered the company’s flagship camera to be in need of an update compared to competing models.

The company has since released several big features, including voice control, image stabilization, and automatic uploads to a new cloud storage service on the GoPro HERO5, and further upgraded with the capability of adding GPS data overlays. The company’s Karma drone was well received for its simplicity, but an error causing the drone to lose power midflight prompted a recall, and the company hasn’t yet indicated when shipments will resume.

In the statement, the company says that it will focus on their core products in a bid to enhance its profitability. “We have a lot of work to do to finish the quarter and our fiscal year,” Woodman said, “however our HERO5 cameras have been very well received by critics and consumers alike.”

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