Bad Karma – GoPro Fires Hundreds of Workers and Exits the Drone Business

January 9th, 2018
Bad Karma - GoPro Fires Hundreds of Workers and Exits the Drone Business

GoPro released its preliminary fourth quarter 2017 report, which reveals that the company is in tough shape. It is firing hundreds of employees and will also exit the drone market.

Karma

Just when it seemed that GoPro was back on the horse again, the company has been facing a significant struggle in an ultra competitive market that lead to low sales, layoffs and the termination of the production of the Karma Drone.

The company shares were down more than 25% yesterday and have recovered slightly since. This is tough to see, especially for a company which was once a stock market darling. Now practically all their business is still reliant on the segment of action cameras, which is also heavily under pressure. 

Bad Karma

The Karma Drone proved to be an expensive and failed adventure from the day it was born. It caused the company a lot of pain, as technical issues and acute malfunctions even resulted in drones falling out of the sky. GoPro executed a mass recall, but then came the DJI Mavic Pro which completely defeated Karma in almost every aspect, and at a lower price point. 

Overview of their Q4/2017 report’s main key points:

  • GoPro is reducing its global workforce from 1,254 employees as of September 30, 2017 to fewer than 1,000 employees worldwide.
  • GoPro founder and CEO Nicholas Woodman will reduce his 2018 cash compensation to $1.
  • Although the Karma Drone reached the #2 market position in its price band in 2017, the product faced margin challenges in an extremely competitive aerial market. Furthermore, a difficult regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead. GoPro claims that these factors make the aerial market untenable and they will exit the market after selling its remaining Karma inventory. They say that they will continue to provide service and support to Karma customers for the time being.

There is no doubt that GoPro is struggling hard to stay in the game. The challenge is not only that DJI seems to act as a main threat to the company, especially in the drone business – GoPro also faces tough competition in the action camera market it more or less created. 

GoPro needs to continue to innovate with new products, since the extreme-sport camera line is not enough any more. 

What is your opinion regarding the GoPro situation? What do you think it has to change in order to succeed? Let us know in the comments. 

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Vasily Schpraga
Vasily Schpraga
GuestJanuary 9th, 2018

Their products were always shit

Mark Davydov
Mark Davydov
GuestJanuary 10th, 2018
Robert Shaw
Robert Shaw
GuestJanuary 9th, 2018

They started the generation of small waterproof cameras but as soon as everyone else jumped on the trend they’ve seemed to have failed at, one keeping a head of the technology and two keeping there prices down. Everyone else who made a similar camera did it a a fraction of the price of a GoPro and they’re just as good.

Adam Simmons
Adam Simmons
GuestJanuary 9th, 2018

Don’t let the door hit ya where your battery falls out midair.

Steve Staffan
MemberJanuary 9th, 2018

lmao

Vlad Box Rojas
MemberJanuary 9th, 2018

You guys are haters of the Karma. The Fake media Media Blogosphere is always creating fake stories. Karma is strong and is the best stable drone out there period. – “Stephen miller”

 stephen paladini
stephen paladini
MemberJanuary 9th, 2018

Karma is strong and is the best stable drone out there period. – “Stevie Wonder”

Vlad Box Rojas
MemberJanuary 9th, 2018

I concurred – “Jose Feliciano”

Nino Leitner
AdminJanuary 9th, 2018

Haha :)

Josh Burkhead
Josh Burkhead
GuestJanuary 12th, 2018

Maybe Nick Woodman should go on Shark Tank to seek some investors

 Dale Berman
Dale Berman
MemberJanuary 15th, 2018

This company could go the way of Kodak or Polaroid. Their drone and cube products have failed and other companies are entering the small sports camera market. The owner did some funny things with his stock and transferring it to his foundation but the foundation had no charity for a tax break. Some of it seemed kind of fishy. Wall Street does not like movements like that. They will have to come up with another product other than the GoPro camera. They might have to reduce the price point of their cameras because the cost of the cameras are too high. They have do to a lot to save the company and bringing in a new leader might help relieve nerves of stock owners. DJI has a strong customer base with their drones. What happens if DJI comes up with a small camera that can be used with the drones and like what the GoPro does in a water proof housing at a cheaper price point. That will eat into the GoPro market share. Just my two cents opinion.

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