GoPro announced that it will lay off more than 200 employees and freeze hiring, amounting to a reduction of about 15% of its workforce, and as part of the restructuring is shutting down its entertainment division. In addition, the company said president Tony Bates will be leaving the company.
Also Wednesday, GoPro also said Black Friday camera unit sales were up more than 35% year-over-year at leading U.S. retailers. GoPro said its Hero5 Black camera has been the best-selling digital-imaging device in the U.S. since it launched Oct. 2, citing NPD Group data.
GoPro shares climbed more than 4% in premarket trading Wednesday on the news.
The move appears to spell the end of the struggling company’s ambitions to branch out beyond device sales into the entertainment biz, which had included plans to produce original shows.
The GoPro entertainment unit has been led by Ocean MacAdams, who previously held programming posts at MTV, Warner Music Group, and the Madison Square Garden Co., after Zander Lurie left in January to become CEO of SurveyMonkey. The division at one point had about 200 staffers, including Bill McCullough, who produced award-winning sports documentaries for HBO, and Joe Lynch, who previously led Time Inc.’s live-streaming initiatives.
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“Consumer demand for GoPro is solid and we’ve sharply narrowed our focus to concentrate on our core business,” CEO Nick Woodman said in a statement. “We are headed into 2017 with a powerful global brand, our best ever products, and a clear road map for restored growth and profitability in 2017.”
The layoffs will reduce full-year 2017 operating expenses to about $735 million, which GoPro said will let it return to profitability on an adjusted basis 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 cancellation of open positions for a reduction in force of approximately 15%.
GoPro said the restructuring will result in total charges of approximately $24 million to $33 million, including $13 million to $18 million of cash expenditures as a result of the layoffs. The company said it expects to record most of the restructuring charges in the fourth quarter of 2016.