GoPro today released preliminary fourth quarter 2017 results which paints the company in a struggling situation. The company says it plans to reduce its headcount in 2018 from 1,254 employees to fewer than 1,000. It also plans to exit the drone market and reduce CEO 2018 compensation to $1.
Pre-market trading of GoPro shares have halted on the news.
The layoffs were expected. Last week TechCrunch reported exclusively on the firings with sources telling us several hundred employees were relieved of duties though officially kept on the books until the middle of February. We were told that the bulk of the layoffs happened in the engineering department of the Karma drone.
GoPro says in today’s announcement that it expects its fourth quarter revenue to be $340 million, a roughly 37% decline over 2016 levels. The company says a the revenue includes negative impact of approximately $80 for price protection for its Hero, Session and Karma products.
“As we noted in our November earnings call, at the start of the holiday quarter we saw soft demand for our HERO5 Black camera,” said GoPro founder and CEO Nicholas Woodman in a released statement. “Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier. Our December 10 holiday price reduction provided a sharp increase in sell-through.”
Though GoPro is clearly done producing the Karma drone, it says it intends to continue to provide service and support to Karma customers.
More details about GoPro’s financial health will be revealed in its fourth quarter and end of year report, which is expected in early February.