GoPro is coming to terms with reality. Despite its best efforts, it’s just a camera company.
The 14-year-old camera manufacturer is cutting costs by laying off more than 200 employees (about 15 percent of its workforce) and instituting a hiring freeze, the company announced Wednesday. The reductions are in an effort to restore the struggling business to profitability come 2017.
GoPro will focus on its products: cameras and drones. “Consumer demand for GoPro is solid and we’ve sharply narrowed our focus to concentrate on our core business,” GoPro CEO Nick Woodman said in a statement. “We are headed into 2017 with a powerful global brand, our best ever products, and a clear road map for restored growth and profitability in 2017.”
It’s been a tough year for GoPro. The company’s share price has more than halved in value. At its last quarterly earnings, GoPro reported that it lost more than $84 million over the three month period. This month, the company had to recall more than 2,500 Karma drones due to them losing power during operation.
GoPro is shutting down its entertainment division — once the company’s grand ambition — to double down on its hardware business.
GoPro president Tony Bates, who joined in June 2014 after previously serving as CEO of Skype, is leaving the company.
Investors are giving up a thumbs up on the changes. Shares were up by more than 3 percent at market open.
In good news, people are still buying GoPro’s products. Black Friday sales at U.S. retailers were up 35 percent from the year prior, and Thanksgiving weekend sales on GoPro.com were up 33 percent.
Interestingly, GoPro’s new narrowed focus as a camera company aligns with Snap Inc., the company formerly known as Snapchat. Snap began selling its first camera, Spectacles, earlier this month, and it has much grander ambitions in hardware as well, with several job listings for supply chain managers and engineers.