© GoPro General | April 16, 2020
Impacted by the pandemic, GoPro pivots
In response to the current global health crisis, GoPro Inc. has announced a multi-pronged strategic re-alignment that includes immediate cost-cutting measures and a withdrawal of its 2020 guidance.
As part of the restructuring, announced in a press release this week, the company will make a USD 100 million reduction to 2020 operating expenses that include reduced office space in five regions, a reduction in headcount of 200, or 20%, and other non-workforce related cuts to bring operating expenses to USD 250 million in 2021. Additionally, GoPro Founder and CEO Nicholas Woodman has decided to forego the rest of his salary for 2020 and GoPro's Board of Directors will forego the remainder of their cash compensation for the same period. In the statement, Woodman said, "GoPro's global distribution network has been negatively impacted by the COVID-19 pandemic, driving us to transition into a more efficient and profitable direct-to-consumer-centric business over the course of this year. We are crushed that this forces us to let go of many talented members of our team, and we are forever grateful for their contributions. We have a clear opportunity to super-serve consumers' demand for our products in a more direct and efficient manner which can have a positive impact on the profitability of our business.” In 2019 GoPro.com attracted an average of seven million unique visitors per month. More than 20% of revenue came from top European markets and approximately 20% from the United States. Additionally, in Q12020, GoPro.com generated significantly more in sales in all regions, year-over-year. GoPro will continue to supply their products to retailers in key regions where consumers show a preference for in-person sales but will shift to a focus on consumer-direct sales in regions where GoPro.com currently has a strong foothold in the market. GoPro CFO and COO Brian McGee said, "We believe our more direct-to-consumer-centric approach is better aligned with the current business climate, is accretive to ASP and gross margin, and positions us well for when consumer demand begins to normalize. Substantially reduced operating expenses combined with improving ASP and gross margin significantly lowers the threshold to achieve profitability." To spearhead the effort, GoPro has appointed Aimée Lapic to the position of chief digital officer. Most recently Lapic served as Chief Marketing Officer for Pandora. Also announced was the withdrawal of the company’s Q1 and full-year 2020 guidance due to “global uncertainty related to the COVID-19 pandemic.” The company said the re-alignment and cost reductions will not impact the company’s 2020 product roadmap, which includes new hardware, software and subscription products for both GoPro camera owners and smartphone-only users.