GoPro Announces Layoffs and a Disappointing Holiday Season
Digital video camera maker GoPro announced during its earning report this week that they plan to lay off 7% of their staff in response to weak holiday numbers — the holidays are the time of year when GoPro typically makes the majority of its sales. The value of their stock quickly slid downward by as far as 24%.
GoPro’s success has always seemed a bit counterintuitive, bursting onto the scene as they did at a time when the convenience of smartphone cameras had already landed a fatal blow to existing digital camera companies such as fLip. What GoPro had going for it, however, was a winning combination of high-quality video and rugged hardware that made it the favorite of daredevils. Its cameras have only gotten better, tougher, and less expensive over time.
When GoPro made its IPO in 2014, though, there were investors who wondered if the company could ever grow beyond its action-oriented niche to become a mainstream product, given that many potential customers were satisfied with the smartphone cameras they already had. GoPro executives admitted the problem, but had faith in a plan to invest in users’ GoPro videos in order to accomplish two things: promote the product and allow the company to generate licensing income from the content. The GoPro YouTube channel has become known for its wealth of compelling videos shot with a GoPro. Edison Investment Research analyst Richard Windsor suggests that the company would’ve been better served by having built a product ecosystem around the GoPro, an approach the company seemingly hasn’t considered.
GoPro’s outlook isn’t completely bleak, though, since its cameras are well-entrenched in the robustly growing video-capable drone market.