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GoPro Exits The Drone Market, CEO Hopeful For The Future, Despite Layoffs

GoPro Exits The Drone Market, CEO Hopeful For The Future, Despite Layoffs

GoPro Inc would be willing to partner with a larger sector player but is not actively engaged in a sale, the action camera-maker said yesterday, as its shares partly rebounded from earlier heavy losses.

GoPro CEO Nick Woodman announced the company will no longer make drones, drawing a line under its Karma, which failed to recover from a recall a year ago after units were reported to fall from the sky.

The company announces that they will no longer be producing drones, the report comes from their most recent earnings report.

GoPro is shutting down its drone business and laying off 20% of its staff due to weak demand for its products. These factors make the aerial market untenable and GoPro will exit the market after selling its remaining Karma inventory.

GoPro did not immediately reply to CNET's request for comment. Mostly, however, they cited the fierce competition in drone manufacturing as the reason the Karma has failed.

Furthermore, it forecasts that tough regulatory hurdles in Europe and the United States will likely reduce the market for drones in the years ahead.

Morgan Stanley said in a research note yesterday that the price cut would make earnings growth hard in fiscal 2018.

The company said it now expects sales of about $340 million, well short of its own previous projection of as much as $480 million and the average analyst estimate of $472 million. The job cuts and business restructuring will result in an estimated charge of $23 to $33 million, most of which will be recognized in the first quarter, the company said.

As the company said it would be making around 250 employees redundant, Woodman announced he would take just $1 in pay for 2018, compared to around $800,000 (£590,000) plus bonuses in 2016.

"Cutting costs is a good move, although now it's about if the company can turn this ship around themselves", Daniel Ives, analyst at GBH Insights, said.

Meanwhile, Chief Executive Nick Woodman has cut his cash compensation to $1 for 2018.

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