All is not well at GoPro.
After a year of missed expectations, the San Mateo, Calif.-based camera maker said on Wednesday that it would be cutting 7% of its staff. The news came as part of a larger announcement in which the company said revenue in its last quarter for 2015 was "lower than anticipated," and is expected to come in at $435 million. Financial analysts polled by Yahoo had expected sales of about $512 million for the period.
"Fourth quarter revenue reflects lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter," the company said in a statement.
The Nasdaq halted GoPro shares from trading after hours likely in anticipation of a large sell-off that could have happened following the announcement. GoPro's stock ending trading on Wednesday at $14.61 a share and is down nearly 70% in the last 12 months.
Layoffs punctuate a particularly rotten 2015 for the Nick Woodman-led company, which has had trouble proving to investors that it can innovate beyond its trademark action cameras. The introduction of the Hero4 Session, a smaller, cube-shaped camera, earlier this year was widely seen as a failure as it initially did not catch on with consumers and, as a result, was heavily discounted by the company. GoPro said that revenue in the fourth quarter, which is typically its strongest due to the holiday season, was hit by a $21 million reduction due to Session's recent repricing from $399 to $199.
The company also anticipates a charge of between $30 million and $35 million that will affect its bottom line due to "excess purchase order commitments, excess inventory, and obsolete tooling." GoPro spokesperson Jeff Brown attributed Session's underwhelming sales to a lack of marketing, poor timing and the high original price point, but noted the customers were buying the devices at the new price tag.
On the cuts to staff, Brown said that "it was a difficult and emotional decision, but it's the right thing to do."
GoPro's employees were notified of the layoffs in a company-wide email from Woodman that was sent out around the time of the announcement. In that email, which was provided to FORBES by a source close to the company, GoPro's founder said there were no further plans to reduce headcount beyond the 7% cut. With a current staff of about 1,500 people, GoPro will lay off more than 100 people.
"Since our IPO we've hired more than 1,000 people to help us grow our core business and capitalize on new business opportunities," Woodman wrote. "We determined that we need to reallocate resources from existing headcount in order to reinvest more aggressively in certain areas of our business, namely software, hardware and media development along with expanded global marketing initiatives."
GoPro also announced that Zander Lurie, who was hired last November as senior vice president of GoPro entertainment, would end his day-to-day role at the company but join the company's board.
While Woodman acknowledged that Wednesday was a rough day for the company, he remained optimistic in signing off his email to employees.
"I know today isn’t the type of day we’re used to at GoPro," he wrote. "But from the looks of things… tomorrow is looking pretty damn good."
