GoPro to cut at least 200 jobs

GoPro Inc. will cut more than 200 full-time positions and close its entertainment division in a company-wide restructuring that comes as the San Mateo firm struggles to establish itself as more than just an action camera maker.

GoPro said Wednesday it will cut back on its facilities and cancel open job positions, potentially saving the company more than $100 million a year, according to analysts. In addition, GoPro President Tony Bates will leave the company at the end of the year.

The company says the restructuring, which cuts its workforce by 15 percent, could cost as much as $33 million, including severance, stock options and office consolidation. It did not say in its statement who would replace Bates or assume his responsibilities. Requests for comment were not returned.

GoPro emerged as a Silicon Valley darling ahead of its 2014 initial public offering thanks to what was once a unique line of products: durable cameras that could record, and withstand, the rigors of extreme sports.

With tech world buzz and extreme sports cache from high-profile endorsement deals with athletes including Olympic snowboarder Shaun White, GoPro surged more than 30 percent in its first day of trading on the Nasdaq Stock Market, closing at $31.34. That closing price put the market value of the company at almost $4 billion.

"They invented a category," Michael Pachter, research analyst at Wedbush Securities, said of GoPro's niche in extreme sports motion capture.

But for investors, that wasn't enough.

"People thought ... everyone will want one. Competition came in, sales started to slow, and I think investors concluded everybody doesn't want one," Pachter said.

As smartphone cameras improved, GoPro planned to bolster revenue, in part, by branching out and becoming more than just a hardware company. Shortly before its IPO, the company announced it had hired Bates, a former Microsoft executive and chief executive of Skype, as president to oversee the company's media strategy. It intended to create a hub for exciting, professionally produced content filmed on GoPro equipment.

"GoPro programming has developed a dedicated and growing audience," the firm said in its IPO filing. "We believe GoPro is well-positioned to become the first media company whose content is captured exclusively using its own hardware."

But the company's attempts to create a YouTube for adrenaline junkies wound up falling flat.

Although building an advertising business around extreme sports videos seemed like a logical extension for GoPro, analysts said the company underestimated the interest in usergenerated videos compared with the professionally produced content favored by the firm.