GoPro cuts jobs and warns its sales are a disaster

GoPro shares are crashing after the company announced it is cutting about 7% of its staff and sales are not great.

In a statement on Wednesday, the digital-camera maker also announced its preliminary fourth-quarter and full-year 2015 results.

It said it expects Q4 revenue to be about $435 million ($511 million expected according to Bloomberg) and $1.6 billion for 2015 — worse than forecast, due to lower-than-anticipated sales.

“Fourth quarter revenue reflects lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter,” it said.

GoPro shares had been halted for news pending after the closing bell, and collapsed by as much as 24% after trading resumed.

GoPro’s performance in the fourth quarter was also impacted by the unspectacular launch of its compact Hero4 model. Analysts at Morgan Stanley cut their price target on the stock in October and essentially described the launch as a flop, after the company slashed the product’s price not long after it was released.

Several analysts have expressed concern about the potential for GoPro’s point-of-view cameras to gain mass appeal beyond the core group of extreme-sports enthusiasts and the like.

GoPro said it will incur a $21 million charge related to further price changes to the Hero4 in December.

The layoffs, which follow a headcount-growth pace of about 50% in the past two years, will cost GoPro between $5 million and $10 million. Much of this will be severance costs, according to the company.

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