GoPro isn't doing so hot these days.
The camera maker has announced it laid off 7 per cent of its workforce, and it issued a notice to investors, alerting them of poor action camera sales as well as disappointing holiday sales. GoPro's workforce had grown 50 per cent annually in the last two years to 1,500 by the end of 2015.
GoPro has declared all this information ahead of its fourth-quarter earnings for 2015. Shares then fell more than 20 per cent in late trading, closing at $14.61, which is just a cent more than its all-time closing low. But keep in mind GoPro's stock has dropped 72 per cent in the last six months.
Fourth-quarter revenue for GoPro should be about $435 million, whereas analysts had an average expectation of $521 million, according to Market Watch. We should know more details by next month, as the company will release its financial results for Q4 and the year on 3 February.
GoPro said it adjusted its guidance for Q4 from about $500 million to $550 million in revenue to $435 million due to "lower than anticipated sales of its capture devices" in the final quarter of 2015. For comparison, it generated $633.9 million in revenue during the same period last year.
GoPro likely suffered such a huge hit because it hasn't released a flagship camera model in more than a year. The Hero 4 Black and Hero 4 Silver came out in late 2014 and sold 2.4 million units during the final quarter. Although GoPro recently released the Hero 4 Session, the device was expensive.
GoPro eventually gave the camera a price cut, but that didn't seem to drive sales. GoPro is now having to lay off its staff as it works to develop new products and categories. In a statement, it said laying off its workforce will incur a charge of $5 million to $10 million, which is probably for severances.
The layoff is part of GoPro's push to "better align resources to key growth initiatives". We can assume that means virtual reality and quadcopters, because GoPro is expected to release products in those areas in 2016.
At CES 2016, for instance, GoPro teased a 360-degree camera for consumers.