Although GoPro founder and CEO Nicholas Woodman is taking a pay cut down to $1, it won’t be enough to save GoPro’s Karma drone or any of the employees tied to its production. After reducing its global workforce from 1,254 employees to fewer than 1,000 as of September 30, 2017, GoPro has announced that it is done with drones.
“Although Karma reached the #2 market position in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market,” GoPro said in its preliminary fourth quarter results. “Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead. These factors make the aerial market untenable and GoPro will exit the market after selling its remaining Karma inventory. GoPro will continue to provide service and support to Karma customers.”
Woodman spoke about the transition in an appearance on CNBC earlier this week.
“When we considered the amount of investment in the category relative to the profit margins that are possible in that category, we determined it wasn’t going to continue to be a sound business investment for us,” Woodman said.
A restructuring of GoPro’s business will result in an estimated aggregate charge of $23 million to $33 million, including approximately $13 million to $18 million of cash expenditures as a result of a reduction in force, substantially all of which are severance and related costs.