GoPro Inc (NASDAQ:GPRO) saw its shares mostly unchanged in Thursday’s first hour, on revealing plans to cut more than 20% of its workforce.
The San Mateo, Calif-based company unearthed actions, which include a $100 million reduction to 2020 operating expenses including a workforce reduction of more than 20%, and plans to further reduce non-headcount related operating expenses to $250 million in 2021.
Also in the future; Office space reductions in five geographies; Sales and marketing expenditure reductions in 2020 and beyond; Additional reductions in spending across the business
CEO Nicholas Woodman said, "GoPro's global distribution network has been negatively impacted by the COVID-19 pandemic, driving us to transition into a more efficient and profitable direct-to-consumer-centric business over the course of this year, We are crushed that this forces us to let go of many talented members of our team, and we are forever grateful for their contributions."
GoPro's direct business has become an increasingly meaningful contributor to profitability in recent years. In 2019, GoPro.com attracted an average of seven million unique visitors each month, generated more than 20% of revenue in top European markets and nearly 20% in the United States. In addition, GoPro.com gained further ground in Q1 2020, generating a considerably larger percentage of sales in all regions, year-over-year.
GoPro reported preliminary Q1 sales of $119 million, versus analysts’ estimates of $148 million.
The Company will be shifting primarily to consumer-direct sales to drive growth in regions where GoPro.com already enjoys a strong share of the market.
Shares dipped 12 cents, or 4.5%, to $2.54.
