It’s likely GoPro (NASDAQ: GPRO) and its shareholders will be glad to see November in their rear-view mirrors. It has been a tough month for the action-camera maker, one in which its stock price fell from a pre-earnings level of $12.84 to its closing price of $9.83 on Tuesday — a 31% decline. Now GoPro has announced it will shed more than 200 full-time positions, and among those heading out the door is President Tony Bates, who is leaving at year’s end.
Combined with GoPro’s decision to take any of its open positions off the table, the staff reduction equals approximately 15% of its workforce. GoPro added it also intends to shutter some facilities, and — in what will likely be viewed as good news by many — close its money-losing entertainment division.
According to founder and CEO Nicholas Woodman, the job cuts and other changes are necessary if GoPro is to return to profitability next year. Part of that plan requires bringing its annual operating expenses down to an estimated $650 million. Through the first three quarters of this year, GoPro’s overhead totaled $596.2 million, including $212.66 million last quarter.
GoPro expects its restructuring will result in charges of between $24 million and $33 million, slightly more than half of which will be cash-related, with the balance in the form of stock compensation and depreciation associated with the office closures.
Earlier this month, GoPro stock took another hit when it announced it was recalling all of the approximately 2,500 new Karma drones it had sold thus far, damaging its outlook for the all-important holiday season.
However, news of the layoffs, cost-reduction plans and the closure of the entertainment division has been well-received. GoPro stock was up by around 3% in mid-afternoon trading Wednesday.
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