Embattled camera maker GoPro will shutter its offices in Los Angeles and Austin as it lays off teams in both cities, Variety has learned from a source familiar with the matter. The company is also looking to wind down its downtown San Francisco office and relocate any remaining staff there to its corporate headquarter in San Mateo, Calif.
GoPro announced earlier Wednesday that it is laying off around 15 percent of its staff, and shuttering its entertainment division, in an effort to rein in costs. “Anything that’s not (…) core, that’s not making money, we will basically not do anymore,” said GoPro CFO Brian McGee during an appearance at the Nasdaq 35th Investor Program Wednesday.
GoPro first announced during its most recent earnings call that it was considering a restructuring to bring operating expenditures to $650 million for 2017. Currently, GoPro’s annual run rate is at $780 million, McGee said Wednesday.
At the center of the layoffs will be GoPro’s entertainment division, which was supposed to transform the company’s video production efforts into a revenue-generating business. GoPro hired a number of heavy hitters for its entertainment plans, including HBO veteran Bill McCullough, former MTV senior VP Ocean MacAdams and former Time Inc. live streaming expert Joe Lynch.
GoPro execs told Variety this summer that the company planned to release a total of 32 original shows towards the end of this and early next year, and outlined plans for a network of stringers and contributors across the globe. “We looked at that pretty hard and said: That’s something we just can’t afford,” McGee said Wednesday about the group.
At this point, it’s unclear if any parts of the entertainment business, including its licensing group, are going to be salvaged. A spokesperson declined to provide any further details on the matter Wednesday.
However, GoPro isn’t just laying off members of the entertainment group. The company is also shutting down the Austin-based team behind Splice, a mobile video editing app that it acquired in February, Variety has learned. The app itself may get shut down soon as well. GoPro spent a combined $105 million to acquire Splice and Replay, a mobile video editing app built by a team in France.
GoPro has been struggling financially ever since it first introduced its Session camera in 2015. The company laid off 100 people in January, and launched a number of new products and initiatives, including a drone and a cloud-based video storage service, this fall.
However, some of these launches have been plagued with problems. GoPro recently had to recall its Karma drone after some models crashed, and sales of its new Hero 5 camera fell short of expectations, something that executives blamed on unforeseen production issues.