While companies like Google are setting records for selling more than one product in every second, the San Mateo county based company in California, GoPro has officially announced that it is ending its business with its Karma drone and cutting off 20 percent of the staff members. Reports shows that Nicholas Woodman, the founder, and CEO of GoPro is also slashing his annual compensation by $1.
But Why Is GoPro Taking Such Drastic Measures?
Consumers’ poor demand for the product has led to more than 1,200 employees losing their position in the company. In 2016, the company had announced a layoff of about 200 staff members. However, staff members expected to go jobless in 2018 increased recently due to the unending struggles experienced in the company’s business.
Yesterday’s staff cut-off marked the fourth group of lay-offs since 2016 in the company. From 1,254 employees, the company wants to have less than 1000 staff members.
According to Woodman, Karma drone was the second-largest seller in the market in the price range. Without a camera, drone costs $800 and $1,100 with a camera. But due to extreme market competition and hostile environmental regulations both in the US and Europe, it’s hard for the company to keep going.
On December 10, GoPro forcefully cut off the price of HERO 5 core camera products because of poor pre-holiday vending. The price cut-off, however, helped boost the sales a little bit. On Sunday, the company also slashed the price of premium HERO 6 black camera for $100. Initially, it sold at $499, but it dropped to $399 just so that the product could keep selling.
In the 2017 fourth quarter revenue report, the preliminary report shows that GoPro made approximately $340 million, a downturn of about $200 million from the previous year. This marks about 37 percent drop compared to the 2016 fourth quarter revenue shares report.
On Monday 8th morning trading shares news, GoPro recorded 23 percent, already a 13 percent loss. At midday on the same day, the trading news showed that the company’s shares sunk to 20 percent.
GoPro says that once all the remaining Karma products are sold out, the company will exit the business.