Key Points:
- GoPro will cut about 15% of its workforce, affecting around 139 employees by the end of 2024.
- The company expects restructuring costs between $5 million and $7 million, with significant cash expenses recognized in the third and fourth quarters.
- GoPro reported a 22.7% decline in Q2 revenue and a 5% increase in operating expenses compared to last year.
- The U.S. ITC is investigating GoPro’s patent infringement claims by Chinese firm Arashi Vision.
GoPro, the popular action camera manufacturer, announced on Monday (Aug 19) that it plans to reduce its workforce by approximately 15% as part of a broader restructuring initiative to cut operating expenses. The move will affect around 139 employees, with layoffs expected to begin in the third quarter and be completed by the end of 2024.
As part of the restructuring plan, GoPro anticipates incurring charges between $5 million and $7 million. These will include cash expenses of around $1 million in the third quarter and an additional $4 million to $6 million in the fourth quarter of 2024.
The company’s decision to downsize follows a challenging financial period. Earlier this month, GoPro reported a revenue decline of 22.7% for the second quarter, with earnings of $186 million compared to last year. Additionally, operating expenses increased by 5% year-over-year, reaching $103 million.
Despite the announcement of layoffs, GoPro’s stock saw a 1.5% increase. The company, which had 925 full-time employees as of June 30, appears to be focusing on streamlining operations and improving financial performance as it navigates a competitive market.
In a separate issue, the U.S. International Trade Commission (ITC) announced in May that it is investigating GoPro’s claims that Chinese company Arashi Vision has violated patents related to GoPro’s cameras, systems, and accessories. Arashi Vision is accused of importing similar products into the United States, potentially infringing on GoPro’s intellectual property.
GoPro’s restructuring and legal challenges highlight the company’s difficulties in maintaining its position in the market amid declining revenues and increasing competition. The layoffs and cost-cutting measures are part of GoPro’s strategy to stabilize its financial footing and adapt to the evolving landscape of the action camera industry.
