GoPro to cut 15 percent of workforce amid sales slump

Wed Nov 30, 2016 10:07am EST
 
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By Anya George Tharakan

(Reuters) - Wearable action-camera maker GoPro Inc (GPRO.O: Quote) said on Wednesday it would cut about 15 percent of its workforce and shutter its entertainment business, as the one-time Wall Street favorite cuts costs to help it return to profitability.

Shares of the company, which had about 1,500 employees at the end of 2015, rose 4.7 percent in early trading.

The company has been struggling with slowing sales of its helmet- and body-mounted cameras as cheaper rivals emerge and smartphones feature increasingly advanced cameras.

A recall of about 2,500 of its recently launched Karma drones could also hit revenue.

The company said on Wednesday it would cut about 200 full-time positions, cancel open positions and close its entertainment division, which makes original content.

GoPro said the cost-cutting would help it achieve its goal of returning to profitability on an adjusted basis next year.

The latest job cuts are in addition to a 7 percent workforce reduction announced at the beginning of the year.

GoPro went public in 2014 amid investor enthusiasm that the California company's focus on social media would make it stand out among other makers of consumer electronics.   Continued...

 
A GoPro device featuring 16 cameras, to be used with Google's "Jump," to provide viewers with 360-degree video, is shown during the Google I/O developers conference in San Francisco, California May 28, 2015.  REUTERS/Robert Galbraith