GoPro is letting go 105 employees, or about seven percent of its staff, after another disappointing quarter that sent its shares tumbling down. The maker of action sports cameras announced last week that its sales for the fourth quarter should reach about $435 million, down by more than 31 percent compared with the same quarter in 2014 and way below GoPro's own forecast of $500 to $550 million.
GoPro said that retail sell-through had been weaker than anticipated, particularly in the first half of the quarter. The company had to take measures to alter the pricing for its latest product, the Hero 4 Session, leading to what GoPro described as a $21 million reduction in sales for price protection.
The company was also hit with a charge of $30 to $35 million to cost of revenues for excess purchase order commitments, excess inventory and obsolete tooling. Excluding the above charges, the group's gross margin for the quarter is expected to range between 44.5 percent and 45.5 percent.
GoPro estimates that it will incur costs of $5 million to $10 million for its restructuring measures in the first quarter of this year, most of them severance costs. The company said that its headcount has grown by more than 50 percent for each of the last two years, building up to more than 1,500 employees at the end of 2015.
GoPro further announced that Zander Lurie, the senior vice president of GoPro Entertainment, resigned from this job and was appointed to the group's board of directors. He had been in charge of pursuing new formats and building added revenue streams for GoPro, focusing on user-generated content.
The company's sales were already below expectations in the third quarter. While its plan to build up sales relating to digital content hasn't worked out spectacularly so far, the company has been faced with competition from other devices, such as drones and 360 degree cameras.
GoPro said the turnover for the full year 2015 should reach about $1.6 billion, amounting to an increase of 16 percent, compared with a rise of 41 percent in 2014. The company is expected to react by building up sales based on digital contents, and the launch of its first drone later this year.
GoPro's share price has shrunk by more than 80 percent since its peak in October 2014, and it has dropped by more than 65 percent compared with the pricing of its initial public offering (IPO) falling to just over $11.