GoPro Drone Business Crashes

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GoPro Drone Business Crashes

The action-adventure camera maker has confirmed that it's cutting almost 300 jobs.

GoPro has reportedly hired J.P Morgan Chase to help the firm get ready for a potential acquisition, according to CNBC.

The company announces that they will no longer be producing drones, the report comes from their most recent earnings report.

"We've always been clear that we are open to any opportunity that will help us scale our mission".

JP Morgan declined to comment.

GoPro is shutting down its drone business and laying off 20% of its staff due to weak demand for its products. Mostly, however, they cited the fierce competition in drone manufacturing as the reason the Karma has failed. "Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead".

Late past year, GoPro said it would lower prices for its Hero5 Black cameras after weak demand. Some analysts have said that the Hero cameras have become a commodity, and that GoPro's main selling point now is its brand.

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier", he added.

In the announcement, GoPro added that it projects its fourth quarter revenue to come in at roughly $340 million, which would mark a 37% fall compared to the fourth quarter of 2016. It also said it plans to cut more than 250 jobs as it restructures.

GoPro is now also facing financial trouble, with the company laying off staff and reducing the salary of CEO Nicholas Woodman, to $1.

"Cutting costs is a good move, although now it's about if the company can turn this ship around themselves", Daniel Ives, analyst at GBH Insights, said. "We expect that going forward, our roadmap coupled with a lower operating expense model will enable GoPro to return to profitability and growth in the second half of 2018", said GoPro CEO Nick Woodman.

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