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GoPro Inc. (NASDAQ:GPRO) will lay off more than 200 employees and sell its adventure cameras directly to consumers amid the coronavirus pandemic.
What Happened
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With its restructuring efforts GoPro, which manufactures action cameras, video-editing software, and mobile apps, will save more than $100 million in 2020. The company also announced a reduction in non-headcount related operating expenses by a further $250 million in 2021, in a statement released on Wednesday.
Nicholas Woodman, the CEO of GoPro, said, “GoPro's global distribution network has been negatively impacted by the COVID-19 pandemic, driving us to transition into a more efficient and profitable direct-to-consumer-centric business over the course of this year.”
The company’s Chief Financial Officer Brian McGee believes the more direct-to-consumer-centric approach is “better aligned with the current business climate, is accretive to [average selling price] and gross margin, and positions [GoPro] well for when consumer demand begins to normalize.” He said the reduced operating expenses and improved ASP and gross margin, would significantly lower the “threshold to achieve profitability.”
Additionally, GoPro announced the appointment of Aimée Lapic as the company’s Chief Digital Officer to lead its direct-to-consumer growth initiatives. Lapic’s previous experience includes the position of Chief Marketing Officer at Pandora, a Sirius XM Holdings Inc. (NASDAQ:SIRI) run music and podcast platform, and at Gap Inc. (NYSE:GPS) owned Banana Republic.
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Why It Matters
GoPro is withdrawing its Q1 and 2020 earnings guidance due to COVID-19 related uncertainty. First-quarter revenue is expected to be $119 million and adjusted loss to the tune of $0.30 per share. GoPro sold 700,000 cameras during the first quarter. It has $125 million in cash and equivalents as of March 31.
Woodman will forego the remainder of his salary till the end of 2020, while the Board of Directors has also volunteered to forego the remainder of their cash compensation.
The adventure camera maker has also reduced its office space in five locations and slashed sales and marketing expenditures for 2020 and beyond.
No change is expected to the 2020 product roadmap, which will involve roll out of new devices and services.
Price Action
GoPro shares traded 3.01% lower at $2.58 in the after-hours session on Wednesday. The shares had closed the regular session 13.64% lower at $2.66.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.