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Following its preliminary fourth quarter 2017 results, GoPro has announced that it will be reducing its global workforce from 1,254 employees as of 30 September 2017; to fewer than 1,000 employees worldwide.
GoPro founder and CEO Nicholas Woodman said: “As we noted in our November earnings call, at the start of the holiday quarter we saw soft demand for our HERO5 Black camera.”
“Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier. Our December 10 holiday price reduction provided a sharp increase in sell-through,” he added.
According to the release, a restructuring of GoPro’s business will result in an estimated aggregate charge of US$23 million to $33 million, including approximately USD$13 million to $18 million of cash expenditures as a result of a reduction in force – substantially all of which are severance and related costs.
Additionally, an approximate of $10 million to $15 million of other charges, consisting primarily of non-cash items. GoPro expects to recognise most of the restructuring charges in the first quarter of 2018.
Following that, GoPro will provide more detail on its 2017 results and 2018 outlook in its fourth quarter earnings report which will take place in early February.
This year will also see GoPro innovating with several new products aimed at new and existing customers. GoPro’s sharper focus will enable an $80 million reduction in operating expenses compared to 2017 levels, resulting in a target operating expense level of below $400 million for 2018 on a non-GAAP basis.
Apart from the restructuring, GoPro notes that the lower non-GAAP operating expense target will be achieved through a variety of strategies – including Woodman reducing his 2018 cash compensation to $1.
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