GoPro makes swift exit from drone market, confirms job cuts following weak Karma sales

In a Monday earnings report, GoPro announced plans to end drone sales after it sells out of remaining Karma models, and engage in cost-cutting measures to right itself financially — including laying off hundreds of people.

Its workforce will shrink from 1,254 to "fewer than 1,000" worldwide, the company said. CEO Nicholas Woodman, meanwhile, will see his 2018 cash compensation shrink to $1.

Fourth-quarter revenue was $340 million, marking the company's worst holiday season since its 2014 IPO, especially since it had already been predicting a low $470 million. To spur demand for its iPhone-compatible Hero action cameras, it dropped the price of the Hero5 Black on Dec. 10, and the Hero6 Black on Jan. 7. The latter is now $399 instead of its original $499.

GoPro should return to profitability in the second half of 2018, Woodman said in a statement. Word of layoffs first emerged last week.

The company had been counting on the Karma to boost business and fend off competition. The drone was launched in late 2016, but was quickly recalled after some units lost power mid-flight. It went back on sale in February 2017, but GoPro was never able to catch up with the likes of China's DJI.

10 Comments

tzm41 95 comments · 8 Years

About 6 years ago

They have not invested in drones D&D for long enough to compete with DJI and the likes anyways...

mark fearing 439 comments · 16 Years

I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.

jume 207 comments · 14 Years

mark fearing said:

I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.

That's exactly whats wrong with this world. Grow grow and grow more! Whats wrong by being small, niche and the best in what you do? Even if it's just a fucking sport camera and the market size is just 300m. We already outgrown ourselves just about everywhere, I think it's time we start shrinking.

sflocal 6135 comments · 16 Years

jume said:

mark fearing said:

I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.

That's exactly whats wrong with this world. Grow grow and grow more! Whats wrong by being small, niche and the best in what you do? Even if it's just a fucking sport camera and the market size is just 300m. We already outgrown ourselves just about everywhere, I think it's time we start shrinking.

It will never happen in the capitalistic society we all live in. Public companies are beholden to it shareholders, and those shareholders always want (demand) increasing stock prices and/or dividends. Shareholders couldn't care any less about being in a niche area and happy with sustainable returns.

No, Wall Street might as well be re-branded as the "Wall Street Casino". Everyone wants their big payday, companies be damned.

jimh2 661 comments · 8 Years

I never understand how sports cameras could be a huge market that only one company would dominate. They definitely should have kept partnering with DJI. When they went public there was no time for screwups.