GoPro said it's cutting more than 20 percent of its global workforce and putting an end to its drone business after a disappointing fourth quarter. "Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier", Woodman added.
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 company's shares, which earlier dropped as much as 33 percent, pared some losses after the report, declining 11 percent to $6.67 at 1:55 p.m.in NY.
The company also mentioned that new regulations in both the U.S and Europe would result in a reduction in the total addressable market, in coming years. GoPro said low margins and a hostile regulatory market in Europe and the USA makes the drone market "untenable".
GoPro has faced intensifying competition in the action camera market, as big tech companies from Samsung Electronics to Google have started selling similar products.
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GoPro has been struggling financially for several years, and was counting on the Karma and the drone business to help them retain market share.
The personal camera manufacturer and distributor says that it will cut more than 250 jobs as it will go from having 1,254 employees to less than 1,000 in 2018.
CEO Nicholas Woodman told CNBC: "If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at".
While GoPro's stock came under serious pressure on Monday, there was one clear victor in its investor base: traders betting against the company. Its holiday results were downright bad, and its disastrous attempt to enter the drone market is the kind of mistake that well-run companies seldom make.