The end of the year is just going to bring more trouble for action camera maker GoPro. After the Karma disaster and subsequent recall, the company is facing a class action lawsuit and was forced to cut 15% of workforce.
Bloomberg reports that after the Karma fiasco, GoPro had to cut costs drastically, giving up their entertainment unit and leaving more than 200 of their employees without a job. But they won’t be the only ones saying goodbye to the company. Tony Bates, who became GoPro’s president in June 2014, is also stepping down this year.
It’s not just about money, though; they want to focus on their strengths – action cameras – instead of spreading themselves too thin with drones and media outlets. You saw what happened with their first drone – the fatal crash many users experienced and the recall that severed their profits in a way they couldn’t have predicted. As a consequence, GoPro’s Q3 revenue was lower than analysts’ average estimates.
Karma drone brought about a lawsuit since GoPro has, apparently, made false and misleading statements about it. The company is accused to have boasted its capabilities when the UAV was about to fail so miserably after 2 weeks from launch.
In a public announcement, they said the restructuring will reduce operating costs to $650 million in 2017, hopefully enough to secure them a place on the action camera market.