GoPro’s recent decision to abandon the Karma drone project and the subsequent layoffs of several hundred employees, mainly from the drone division, has sent shockwaves through the tech industry. The move comes on the heels of a series of setbacks and challenges for the action camera giant, and it highlights the struggles it faces in an increasingly competitive market.
The layoffs, while abrupt, were not entirely unexpected, as GoPro had previously announced impending job cuts. Employees affected by the layoffs were assured of compensation until February 16th of the same year, which provides some financial support during this transitional period. The official rationale provided by GoPro was that these measures were necessary to align the company with evolving business requirements.
The Karma drone project was plagued with issues right from the start. Initially slated for a 2016 release, GoPro faced delays in bringing the product to market. When Karma drones were eventually released, they suffered from disastrous performance, leading to a recall of 2500 units. Customers reported their drones losing power mid-flight and crashing. Jeff Brown, a spokesperson for GoPro, acknowledged the problem, attributing it to a power issue that was resolved by attaching a simple piece of tape to the drone. However, the damage to the product’s reputation had already been done.
This isn’t the first time GoPro has resorted to layoffs as a cost-cutting strategy. In 2016, the company let go of 15% of its workforce and shut down its entertainment division. In the following year, in March 2017, GoPro laid off another 17% of its staff, reflecting the ongoing difficulties the company faced in achieving profitability.
GoPro’s financial struggles have been well-documented. While they managed to post a modest profit of about $15 million in 2017, it pales in comparison to the staggering $104 million loss they incurred the previous year. This rollercoaster financial performance underscores the immense challenges facing GoPro in a fiercely competitive market where rival drone manufacturers and action camera companies have been vying for market share.
Notably, during their 2017 financial report, GoPro touted the Karma drone as the second best-selling drone in the United States for products priced higher than $1000. However, the cancellation of the Karma drone project and the subsequent layoffs send a stark message to the industry, indicating that the market’s dynamics and consumer preferences might have evolved, making it increasingly challenging for GoPro to maintain a competitive edge in the drone sector.
The future of GoPro remains uncertain, as it navigates through these turbulent times in an ever-evolving tech landscape. Whether the company can successfully pivot and regain its footing in the market or if further restructuring is on the horizon will be closely watched by both industry insiders and consumers alike.
Via: Gizmodo
