GoPro’s future was once hanging on its Karma drone, but it sounds like things might not be going so well. We’re hearing about job cuts in GoPro’s drone division; possibly as many as 300 workers could receive pink slips this week.
Hundreds of job cuts in GoPro’s drone division: report
There had been a ray of hope that things were turning around after the initial disaster with GoPro’s Karma, which had to be recalled out of the gate. After the drone was fixed and re-released, a few analysts talked up the progress being made in this area. Things apparently aren’t as rosy as some GoPro stock bulls would have investors believe, although those who have been following the company for some time won’t be surprised, as we heard less and less about the Karma drone as last year wore on.
Citing sources close to the company, TechCrunch reports that the action camera maker is slashing 200 to 300 jobs in its aerial division, the segment that takes care of the firm’s Karma drone. According to the tech blog, a letter sent to employees caught in the net of the job cuts in GoPro’s drone division stated that the layoffs are part of a bigger restructuring effort aimed at improving the alignment of “resources with business requirements.”
Attempt to keep job cuts quiet for now
TechCrunch’s sources said that the employees who were laid off were relieved of their duties today, but GoPro plans to leave them on its payroll until February 16. The move could reportedly be aimed at keeping the news under wraps until after the Consumer Electronics Show. Further, the announcement about the job cuts in GoPro’s drone division could be tied in with the next earnings report, just as the company has done when it has laid off employees in the past.
If the report is accurate, then the job cuts in GoPro’s drone division will be the company’s fourth round of layoffs since 2016. It also seems as if the company’s attempts to diversify beyond the action cameras it is known for continue to flop, as another attempt to diversify—the entertainment division—was the focal point of layoffs in the past.
GoPro stock was little changed in intraday trading on Friday. It sank by as much as 0.26% to $7.55 in early afternoon trades.