Parrot lays off 35 percent of its drone team

French company Parrot has had a rough year and missed its sales expectations. That’s why the company will lay off 290 employees who were working on drones. In total, Parrot currently has 840 employees on the drone team and more than a thousand employees in total.

While the company isn’t just selling drones, it represents a good chunk of the business. But it looks like other companies, such as DJI, are doing better in this market. Parrot expected to report $105.9 million in sales for 2016. It reported $90 million instead (€85 million vs. €100 million expected).

Even though the company is still selling quite a few drones, Parrot says that it doesn’t generate healthy margins. So here’s the new plan: focusing on commercial drones.

When I interviewed Parrot founder and CEO Henri Seydoux last year, he was passionate about new use cases when it comes to commercial drones. The company has made a few acquisitions to become a key player in this space. SenseFly, Airinov, MicaSense and Pix4D are now all owned by Parrot.

You can use drones for agriculture, inspection, deliveries, etc. Tech companies are probably just scratching the surface with these new use cases. Right now, 18.3 percent of Parrot’s drone revenue comes from commercial drone. While it’s still a nascent business, it’s growing.

For 2017, Parrot expects to grow by 10 percent for both drone and automotive activities. Parrot has been quiet during CES last week. There wasn’t any big splashy product announcement. It’s clear that the company had other things to do.