SAN FRANCISCO — On Wednesday, GoPro announced it will cut 7% of its workforce and that revenue last year was less than expected, sending the mini-camera maker’s shares into a dive.
GoPro shares fell more than 22% to $11.33 in aftermarket trades that release of preliminary financial results for the end of last year.
The job cuts represent hundreds of positions, with the stated intent being to “better align resources to key growth initiatives.” GoPro said that its ranks of employees had been growing by more than 50% annually and tallied more than 1,500 as of the end of 2015.
GoPro released preliminary figures, indicating that revenue for the final quarter of last year was approximately $435 million and was expected to tally $1.6 billion for all of 2015. The revenue represented a significant drop from the previous year and was well below analysts’ expectations. GoPro said the preliminary take on the fourth quarter reflected lower-than-anticipated-sales of its cameras.
GoPro will release its official earnings figures for last year on Feb. 3.
The company, which went public in June 2014, was an early hit with extreme sports enthusiasts who used the mini-cameras to film their exploits and went on to win over teens and young adults interested in sharing videos on YouTube or social networks. It was also a hit at the markets, with shares initially priced at $24 and soaring in subsequent months, more than tripling in value at one point.
But, investors began to worry about the company’s growth prospects and the possible saturation of an increasingly competitive market. GoPro shares began sliding last year, losing some three-quarters of their value since August.
Copyright Agence France-Presse, 2016