GoPro Announces Workforce Reduction and Office Space Cutbacks to Save $7.5 Million

Key Points

• GoPro, Inc. (GPRO) to cut its global workforce by 4% as part of a restructuring plan to save $7.5 million in costs.
• The company will incur estimated aggregate costs of $7.5 million, with significant charges expected in the first quarter of 2024.
• The restructuring includes reducing office space, with anticipated charges through January 2027, as GoPro seeks stronger operating leverage.

In this news

In a strategic move to streamline operations and enhance financial efficiency, GoPro, Inc. (GPRO) has announced a significant restructuring plan that will see a 4% reduction in its global workforce. This decision comes as the company aims to shave approximately $7.5 million in costs, a measure that was well-received by investors, with GoPro's stock rising 3.6% in extended trading on Tuesday.

The cost-cutting initiative is expected to incur estimated aggregate costs of the same amount, with about $2 million in cash expenditures related to job cuts in the first quarter of 2024. The California-based digital-camera maker will also reduce office space, leading to impairment charges of nearly $3.3 million in the first quarter of 2024 and additional office space charges of roughly $2.2 million through January 2027. These restructuring charges are anticipated to be substantially reflected in GoPro's GAAP results for the first quarter of the fiscal year ending December 31, 2024.

While the immediate financial implications of the restructuring are clear, the long-term impact on GoPro's market position and operational efficiency remains to be seen. The company has been grappling with challenges, including sales targets that seem increasingly out of reach and a stock price that closed lower by 2.64% at $2.21 on Tuesday. With this restructuring, GoPro aims to achieve stronger operating leverage and position itself for future growth amidst a competitive landscape.