GoPro To Cut Jobs Following Slow Q4 Sales
GoPro is set to cut 7 per cent of its workforce, having forecast lower than expected fourth quarter revenue ahead of the release of its financial results for the quarter and full year 2015.
GoPro stated it expects revenue to be approximately US$435 million for the quarter. As reported by Reuters, the revenue outlook is well below analysts’ average estimate of US$511.9 million, according to Thomson Reuters I/B/E/S.
“Fourth quarter revenue reflects lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter,” GoPro stated.
GoPro stated its revenue for the quarter includes a US$21 million reduction for price protection-related charges resulting from the Hero4 Session repricing in December.
It added that it will also incur a charge of between US$30 million and US$35 million to cost of revenue “for excess purchase order commitments, excess inventory and obsolete tooling”.
GoPro advised that it had more than 1,500 employees at the end of 2015.
“To better align resources to key growth initiatives, GoPro has implemented a reduction in its workforce of approximately 7 per cent,” it stated.
GoPro estimates it will incur approximately US$5 million to US$10 million of restructuring expenses in the first quarter of 2016, substantially all of which will be severance costs.
As reported by Reuters, GoPro shares dove 28 per cent to US$10.50 in extended trading.