GoPro announced late November that the company will reduce its headcount by 200 jobs. The company says this will reduce its 2017 operating expenses to about $650 million and will help the company fulfill CEO Nick Woodman’s stated goal of returning the company to profitability in 2017.
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Analysts are curious to see what percentage of the layoffs pertains to the upper management because that’s where the bad decisions are being made. Shares of GoPro Inc. jumped 3.3% in premarket trade Wednesday, after the action camera maker announced the restructuring plans. GoPro said the restructuring, which will include the closing of its entertainment division and facilities reductions.
It seems like discarding the entertainment division is a high risk move considering the brand is heavily based on entertainment marketability. Online entertainment drives interest in GoPro, and without the videos they are just another camera company.
Unforunate KARMA
What came as a surprise in October 2016 is that only 2,500 KARMA products were shipped while pre-order numbers were much higher. Why were so few units shipped?
Many community members have come to speculate that the reason is either caused by the lack of demand or that there was a massive screw-up on the logistical end. Sales in the post-launch phase depends on the momentum created by the users who just got their units and are ecstatic about it.
My time at GoPro has been an incredible experience. In the past three years, GoPro has seen enormous progress in camera technology, software and international growth. Today GoPro has a solid leadership team deeply focused on its core business and profitability. – Tony Bates, President of GoPro Inc.
GoPro also announced that its President, Tony Bates, is planning to relinquish his title at the end of the year. Bates spent over 2 years with the company and has aided in the new product launches including HERO5 Black, HERO5 Session, and KARMA.
HERO5 Session is easily the best bang for your buck action camera on the market right now. User experience is awesome, quality is great, and the price is just right to force people to think twice about going for the flagship. GoPro has clearly learned from their mistakes though some are saying too little too late.
The 2016 HERO and Session products will slash 2017 adjusted operating expenses to about $650 million, GoPro told Ace Media. Through the 2016 Q1 – Q3, the company logged $596 million in adjusted operating expenses. GoPro expects about $24 million to $33 million in Q4 restructuring charges stemming from the cost cuts. The company is expected to report results in early February 2017.
Where to go from here?
According to the GoPro community, the company should reconsider implementing features which aggravate consumers rather than make them happy. Running a business is a relationship with your customers and it’s a balance. Some feel that GoPro has swung that balance to the hard right in their favor while completely forgetting their prime customer and what genuine users want to see.
GoPro should be restructuring the Karma staff. Justify the restructuring based on the core business of action cameras and wearable technology instead of putting all their eggs into the drone market.
Rather than bring products to market late, consider incremental upgrades. The fact that the Karma Grip and drone connect into a cohesive unit are secondary to the issue that they’re so late to market. A true business leader wants to be out front and stay in front; being 5 years behind on technology is not being ahead of its times.
GoPro should work hard in delivering the KARMA in time for the holiday season. Missing the prime time for consumers is going to hit hard against the company, thus playing catch up on sales into 2017 is going to be an uphill battle.
