GoPro ($GPRO) sells durable, high-definition “action cameras” that you can put pretty much anywhere. They’re the top seller of these cameras, and many athletes, drone enthusiasts, and filmmakers own GoPro devices.
Selling these awesome cameras and their many accessories was once a lucrative business for the San Mateo-based company, and they became a publicly traded company in 2014. GoPro quickly learned, however, that they can’t just sell cameras. They needed to sell drones, too, and other products relevant to their customers.
Unfortunately, those drones launched too late in a popular sector already filled with numerous competitors. That, and their drones were recalled when some users found they would stop working mid-flight.
Now, the company is taking drastic measures to ensure their future success…by letting go of 200 workers.
After Black Friday and Cyber Monday, GoPro sent out a press release about their “solid” holiday sales.
The company’s cameras sold significantly better than they did last year during the same period. The company’s Hero5 Black camera also became the “best-selling Digital Imaging device in the United States,” according to NPD Group.
Earlier this month, however, GoPro detailed the recall for their Karma drone, which will cost the company $3 million.
Though GoPro only sold 2,500 of the drones, a certain number of them fell out of the sky. Karma owners will receive a free new GoPro camera worth $400 and a replacement drone for their troubles. They can also return the drone and keep the camera. This recall is not a great start for a company that struggled to get into the drone market.
Today, GoPro announced that they would cut 200 positions from their company.
Despite better sales of their camera during the holiday season, the company is still struggling. Cutting 200 jobs is awful for the workforce, but it would allow GoPro to restructure their company. GoPro President Tony Bates will also leave the company by the year’s end.
Despite the mixed news, GoPro’s stock is up.
No one likes to see anyone lose their job, but GoPro no longer has to pay the salaries, benefits, and expenses for 200 people. This gives the company more cash to work with for things like product development, marketing, manufacturing, and anything that will help their business. Investors are happy about this, demanding more of the company’s stock and driving up its price.
GoPro cameras are fun, innovative, and durable, but they don’t necessarily lead to repeat purchases when you already own one, something the company knows all too well. That’s why the company diversified their product offering with the Karma drone. If GoPro can prove to customers that its drone is safe to use and introduce new products, they could have a bright future. Until then, the company needs to restructure in a way to focus on what they already offer.
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