Bad Karma: GoPro slashes jobs, will exit its drone business

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The disappointing outlook sent shares plummeting almost a third to an all-time low of $5.04 in morning trading Monday.

Instead, the action camera maker confirmed it's ending Karma production and will cut almost 300 jobs, or more than 20% of its global workforce.

GoPro will discontinue production and sales of its Karma drone, which it claims reached the number two market position in its price band in 2017. The job cuts and business restructuring will result in an estimated charge of $23 million to $33 million, most of which will be recognized in the first quarter, the company said. The company now estimates its fourth-quarter sales at about $340 million, while it previously had been expecting about $480 million in sales.

GoPro CEO Nick Woodman introduces the new foldable Karma drone during a press event in Olympic Valley, California on September 19, 2016.

Management has already hired JPMorgan Chase to facilitate discussions, according to CNBC sources, but whether buyers have yet come forward remains unknown. Its new device, the Hero6 Black, has seen a price cut of $100, and you can likely expect more aggressive promotions and new cameras coming soon. CEO Nick Woodman, speaking to CNBC, commented on the company's plans: "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".

A GoPro camera was engulfed by lava on Kilauea volcano.

GoPro will no longer market drones after it sells off remaining inventory, but will continue to provide services and support to Karma customers, it said.

He hoped the actions would return the firm to profitability in the second half of 2018. "These factors make the aerial market untenable", GoPro said. But GoPro saw its sales slump in 2016 as companies began flooding the market with cheaper, sometimes, comparable alternatives to the GoPro.