GoPro has announced plans to restructure the company, saying it will layoff 200 full-time workers, close its entertainment division, reduce its facilities, and cancel open positions. By doing these things, GoPro will reduce its workforce by 15% and will, it anticipates, reduce its non-GAAP operating expenses next year.
GoPro announced the news today as part of its quarterly earnings report. According to the company, GoPro camera sales in the U.S. were up more than 35% this past Black Friday in comparison to the same time period last year. However, its turbulent financial state over the past year has spurred the company to make some big changes.
In addition to shedding 15% of its workforce, GoPro President Tony Bates will step down from his position at the end of 2016. GoPro didn’t provide a reason for his departure. Assuming all goes as planned, GoPro expects to reach non-GAAP profitability next year, with its full 2017 non-GAAP operating expenses dropping to about $650 million.
Solid Holiday Demand In The U.S. For GoPro HERO5
Nov 30, 2016
Week of Black Friday Camera Unit Sales Up 35% YoY in U.S.
Company Restructuring to Reduce Operating Expenses and Improve Efficiency
SAN MATEO, Calif., Nov. 30, 2016 /PRNewswire/ — GoPro Inc. (NASDAQ: GPRO) today announced solid holiday quarter sell-thru in the U.S. for its new HERO5 cameras.
Based on internal data, GoPro’s week of Black Friday camera unit sales were up more than 35% year-over-year at leading U.S. retailers. Thanksgiving through Cyber Monday sales of camera units at GoPro.com were up approximately 33% year-over-year. According to the NPD Group, since the launch on October 2, HERO5 Black has been the best-selling Digital Imaging device in the United States.
HERO5 cameras are available at major US retailers including Amazon, Best Buy, Target and Walmart.
“We have a lot of work to do to finish the quarter and our fiscal year, however our HERO5 cameras have been very well-received by critics and consumers alike,” said Nicholas Woodman, Founder & CEO of GoPro. “Both HERO5 cameras can now auto-offload new content to the cloud and our Quik mobile app makes accessing and editing your footage fun. Its clear consumers are excited about these new features.”
GoPro also announced a company-wide restructuring that will reduce full-year 2017 non-GAAP operating expenses to approximately $650 million (GAAP: $735 million) and achieve its goal of returning to non-GAAP profitability in 2017. The restructuring includes the closure of its entertainment division, facilities reductions, and the elimination of more than 200 full-time positions plus the cancelation of open positions for a reduction in force of approximately 15 percent.
Additionally, Tony Bates will depart his position as president of the Company at the end of the year. “My time at GoPro has been an incredible experience,” said Tony Bates. “In the past three years, GoPro has seen enormous progress in camera technology, software and international growth. Today GoPro has a solid leadership team deeply focused on its core business and profitability.”
GoPro estimates that it will incur total aggregate charges of approximately $24 million to $33 million for the restructuring, including approximately $13 million to $18 million of cash expenditures as a result of the workforce restructuring, substantially all of which are severance costs, and approximately $11 million to $15 million of non-cash expenditures, consisting primarily of stock-based compensation expense and accelerated depreciation associated with office consolidations. The company expects to recognize most of the restructuring charges in Q4 2016.
“Consumer demand for GoPro is solid and we’ve sharply narrowed our focus to concentrate on our core business,” said Nicholas Woodman. “We are headed into 2017 with a powerful global brand, our best ever products, and a clear roadmap for restored growth and profitability in 2017.”