The shares of GoPro Inc (NASDAQ:GPRO) plummeted during the extended trading after the action camera maker announced its jobs cuts and preliminary financial results for the fourth quarter and fiscal 2015.
The stock price of GoPro declined more than 22% to $11.36 per share around 4:47 in the afternoon in New York today, October 13.
GoPro workforce reduction
According to the management, GoPro’s headcount increased more than 50% annually to more than 1,500 employees over the past two years. The management decided to reduce the number of its workforce by approximately 7% to better align the company’s resources to key growth initiatives.
The company expected to incur restructuring expenses of around $5 million to $10 million during the first quarter.
Preliminary financial results
GoPro estimated its fourth-quarter revenue to be around $435 million, lower than the $510.9 million expected by analysts based on data compiled by Bloomberg.
The company explained that its revenue forecast for the quarter reflects its lower than anticipated sales of its cameras due to slower than expected sell through at retailers.
GoPro said its estimated quarterly revenue included a $21 million reduction for price protection related to charges resulting from HERO4 Session price adjustment in December.
The action camera maker expected its non-GAAP gross margin to be around 34.4% to $35.5% and non-GAAP operating expenses between $150 million and $152.5 million for the fourth quarter.
For the full fiscal 2015, GoPro estimated to post $1.6 billion in revenue. The company is scheduled to release its final financial results after the market closes on February 3, 2015.
Additionally, the company announced that Zander Lurie stepped down from his position as senior vice president of GoPro Entertainment. He was appointed to become a member of the Board of Directors.
“Mr. Lurie has deep experience working with Internet-based business models across digital and traditional media. At GoPro Entertainment, he built a team dedicated to pursuing new formats and revenue streams from user-generated content and the company’s large cache of digital entertainment,” according to the action camera maker.
Before joining GoPro, Mr., and Lurie served as CFO and head of corporate development at CNET Networks, which was acquired by CBS Corporation (NYSE:CBS). He became an executive at CBS after the acquisition. He also previously worked at JPMorgan Chase & Co. (NYSE:JPM).