GoPro Inc. Announces Job Cuts and Withdraws 2020 Financial Guidance
Digital adventure camera maker GoPro announced this week that it will slash over 200 jobs and shift the company’s sales operation to market its digital adventure cameras directly to consumers. The company also said that it would withdraw its 2020 financial guidance in response to the Covid-19 pandemic.
According to a statement from GoPro, these operational changes, staff reductions of more than 20% and cuts to office space will save $100 million in 2020, and reduce expenses next year to $250 million. The company said its shift to direct sales will mean a stronger focus on its website and that it will still use retail outlets for a small number of regions where such sales are preferred by consumers.
“We have a clear opportunity to super-serve consumers’ demand for our products in a more direct and efficient manner which can have a positive impact on the profitability of our business,” Chief Executive Officer Nick Woodman stated.
The company now expects to report first-quarter revenue of $119 million and an adjusted loss in the mid-30 cents a share. GoPro sold 700,000 cameras in the period, and said the staff and operational changes won’t affect its 2020 product road map, which will include new devices and services.
“We believe our more direct-to-consumer-centric approach is better aligned with the current business climate, is accretive to ASP and gross margin, and positions us well for when consumer demand begins to normalize,” said Brian McGee, GoPro’s Chief Financial Officer and Chief Operating Officer. “Substantially reduced operating expenses combined with improving ASP and gross margin significantly lowers the threshold to achieve profitability.”
Disclaimer: We have no position in GoPro Inc. (NASDAQ: GPRO) and have not been compensated for this article.