GoPro Inc. is planning to cut down its work force by 15 percent or 200 jobs from its total of 1,700 company personnel. The main reason given is because that their expansion into the entertainment industry has not taken root.
The company has done well in the past producing drones and high quality cameras. According to Wall Street Journal, GoPro turned its attention to the media industry and opened an entertainment division, hoping to expand its operations. It is mostly this division that will suffer the jobs cuts.
After the announcement of the cuts, the value of the company's shares increased by five percent. However, as of todate this year, GoPro stocks have already gone down by 44 percent.
As reported by iTech Post, the company hopes that firing 200 regular employees and closing down the entertainment division will help the company become profitable anew. The company will be able to save $650 million in expenses in 2017.
The man GoPro recruited to head the entertainment division, President Tony Bates is also set to leave the company by the end of this year. It looks like the company is altogether abandoning its entry into the entertainment industry.
The company also had hired HBO executive Bill McCullough to help in its venture into the media market. It was planning to sell ads against online video content posted by users featuring original programming described in the IPO prospectus. GoPro engaged the market aggressively, going into partnerships with Virgin America and Xbox Live. Still, no profits ensued.
Analysts agree that GoPro should have stabilized first its main business of cameras and drones production before venturing into other business lines. The camera and drones market at present are under attack by competitors.
The smart phone technology has been developing fast and their cameras are as good as any. With the entertainment Division gone, GoPro can now concentrate in doing what they do best, producing the best camera brands in the market.
