Action-camera maker GoPro Inc. (NASDAQ:GPRO) stunned investors with the revelation of 270 more layoffs, predicting revenue on the high end of its guidance, and profitability on an adjusted, or EBITDA, basis in 2017.
Few months earlier GoPro Inc. (NASDAQ:GPRO) had slashed few jobs, and it is now claiming that more job cuts won’t hurt its product development cycle.
This news have surged the stock higher up. GoPro’s stock is still worth about half what they were at their 52-week high. And Goldman Sachs recently downgraded the stock to a sell, quoting a number of its challenges, like saturation in its core camera market, a new rival and worries about its cash flow.
GoPro Executives said in a statement that the these latest job cuts were a result of a comprehensive review of all its business operations and procedures.
“We are confident that we are not making those trade-offs,” said Charles “C.J.” Prober, who was named chief operating officer in January, when asked whether the additional job cuts would affect new product development. “By being more focused we feel we are improving our efficiency and doing fewer things, better.” Executives also said GoPro has enough cash and doesn’t see a need to draw on its line of credit.
These layoffs followed after in November GoPro’s shocked everyone by announcing redundancy of almost 15% of its employees, including the shutting down of its once-vaunted entertainment section and a recall of its new Karma drone. GoPro has since re-launched the Karma drone, but so far reviews have been indifferent.
According to reports, GoPro (GPRO) is counting on two new cameras and a drone it just launched and is hoping it will boost the company sales after last year’s flop of its flagship camera.