Although citing “solid holiday demand” for its new HERO5 camera in the U.S., the company has announced a restructuring that will include the layoff of more than 200 full-time positions – plus the cancellation of open positions – for a reduction in force of approximately 15%.
Based on internal data, GoPro’s week of Black Friday camera unit sales were up more than 35% year over year at U.S. retailers (e.g., Amazon, Best Buy, Target and Walmart). In addition, Thanksgiving through Cyber Monday sales of camera units at GoPro.com were up approximately 33% year over year.
However, GoPro’s company-wide restructuring for 2017 will reduce full-year non-GAAP operating expenses to approximately $650 million (GAAP $735 million) in order achieve its goal of returning to non-GAAP profitability in 2017.
Earlier this month, GoPro had to recall its highly anticipated launched Karma drones, which, in a very small number of cases, lost power during flight, the company said.
In addition to the layoffs, the newly announced restructuring includes the closure of its entertainment division and reduction of other facilities. Also, at the end of the year, Tony Bates will depart his position as president of the company.
“My time at GoPro has been an incredible experience,” says Bates. “In the past three years, GoPro has seen enormous progress in camera technology, software and international growth. Today, GoPro has a solid leadership team deeply focused on its core business and profitability.”
GoPro estimates that it will incur total aggregate charges of approximately $24 million to $33 million for the restructuring, including approximately $13 million to $18 million of cash expenditures as a result of the workforce restructuring – substantially all of which are severance costs – and approximately $11 million to $15 million of non-cash expenditures, consisting primarily of stock-based compensation expense and accelerated depreciation associated with office consolidations.
The company expects to recognize most of the restructuring charges in the fourth quarter of this year.
“Consumer demand for GoPro is solid, and we’ve sharply narrowed our focus to concentrate on our core business,” says Nicholas Woodman, GoPro’s founder and CEO. “We are headed into 2017 with a powerful global brand, our best-ever products, and a clear roadmap for restored growth and profitability in 2017.”