Amid ongoing social distancing efforts, both VSCO and GoPro have announced major business changes resulting from the economic downturn. In a post on his LinkedIn account, VSCO CEO Joel Flory revealed that his company had to lay off 45 employees this week. The announcement was followed by a similar message from GoPro, which revealed that it will be reducing its number of employees by 20%.
Many companies are struggling to stay above water as a number of states and countries implement lockdown measures. Many businesses have been forced to temporarily close down, and while others remain in business, a drop in consumer purchasing has left some companies struggling to keep their revenue up.
In a post on his LinkedIn account, Flory said that VSCO had expected 2020 to be 'a year where we would continue to forward invest into our business.' However, things didn't go as planned and Flory said, 'Overnight our environment changed. We realize that we would need to shift towards running a self-sustaining business.'
The company is giving its laid-off employees a minimum of two months of healthcare coverage and seven weeks of severance pay, according to Flory, who says that the company is also assisting them in other ways. VSCO plans to continue releasing new features this year, though details on what the company has planned weren't revealed.
GoPro, meanwhile, published its preliminary Q1 financial requests on April 15 and withdrew its 2020 guidance in light of the pandemic. The company said that it is restructuring its business model to focus on direct-to-consumer sales and that as part of its global restructuring, it plans to lay off more than 20% of its workforce.
These layoffs will contribute to a $100 million reduction in operating expenses for the year, according to GoPro, which plans to shed another $250 million in operating expenses next year.
Company CEO Nicholas Woodman said that GoPro's distribution network has been hit by the novel coronavirus pandemic and that as a result, the company must expedite its shift to a 'more efficient and profitable direct-to-consumer-centric business' model this year, something GoPro had already been pursuing. 'We are crushed that this forces us to let go of many talented members of our team,' Woodman said, 'and we are forever grateful for their contributions.'
Though GoPro will primarily sell directly to consumers, the company says it will continue to make its products available through 'select leading retailers' in only 'key regions' for consumers who prefer to buy items indirectly and at physical stores. Other planned changes include reducing office space in five different locations, reducing its sales and marketing throughout this year 'and beyond,' as well as cutting spending in other unspecified ways.
Despite the changes, GoPro said that it still plans to move ahead with its 2020 product roadmap, which will include releasing new software, subscriptions and hardware targeted at action camera and smartphone owners. Woodman has voluntarily decided to skip the remainder of his 2020 salary, according to the company, which says its Board of Directors has also made the decision to avoid any additional cash compensation throughout the remainder of the year.