GoPro grounds drones business blaming tough rules in United States and Europe

A Go Pro device featuring 16 cameras to be used with Google's

Shares of GoPro nosedived 25 percent on Monday morning after the portable camera company announced weak financial guidance, and that it'd be laying off at least 250 workers.

Although GoPro's Karma drone was the number two offering in its price division, the company will exit the "extremely competitive" drone market, it said.

The salary of chief executive Nicholas Woodman has also been cut to just $1 in an effort to reduce expenses.

GoPro blamed a hostile regulatory environment in the USA and Europe along with an extremely competitive market for the decision to cut drones.

Even though GoPro is exiting the drone business, drone makers such as DJI might be interested in the company purely for its cameras, which could be packaged with their drones. The company's stock (GPRO) plunged almost 30 percent in response to the announcement.

In its statement today, GoPro also cited the hard regulatory regimes in the USA and Europe as the reason why it doesn't think the drone market will be lucrative in the long term.

GoPro first introduced its Karma drone in 2016, but the project was plagued with problems from the onset. The company has always been criticized by investors for failing to diversify its product line away from its action cameras, which cater mainly to extreme sports enthusiasts. However, the company had to recall all units in November previous year due to a battery issue that caused its drones to just fall out of the sky.

Along with the job cuts and plans to get out of the drone business, GoPro released preliminary fourth-quarter results, which didn't do anything to inspire investors' confidence. "Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier". Given the concerns about less expensive alternatives eating away at GoPro's action-camera market share, this price cut is not a good development. The company now estimates its fourth-quarter sales at about $340 million, while it previously had been expecting about $480 million in sales.

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