GoPro has revealed that it expects 16 percent increase in annual revenue for 2015. However, the good news for the company ends there.

The company struggled with disappointing sales figures for its latest model, the Hero4 Session, and added that it will be cutting about 7 percent of its workforce, which is approximately 105 employees from its workforce of over 1,500.

GoPro said that it will be implementing the workforce reduction so that it would be able to better align its resources to its key growth initiatives. The company said that it will be incurring about $5 million to $10 million worth of restructuring expenses in the first quarter, with almost the entire expense related to severance costs.

According to GoPro's press release that announced its preliminary results for the fourth quarter of 2015 and full-year 2015, the company's expected revenue for the fourth quarter of last year is about $435 million, which is lower than the anticipated figure of $500 million to $550 million due to slower sales from retailers. GoPro had pinned its hopes on the Hero4 Session, but the latest model of its action cameras did not sell well. Launched in July, the Hero4 Session already saw two price cuts by December, reducing its original price of $400 to $199.

The company also said that it will be recording an expense of $21 million for charges related to price protection, which is associated with the price cuts on the Hero4 Session, and an additional expense of $30 million to $35 million related to surplus inventory and parts and obsolete tools for camera production.

"They totally misjudged the market on that one," said Jackdaw Research chief analyst Jan Dawson regarding the price cuts on the Hero4 Session, adding that the move undercut the other products of the company.

The price of GoPro's shares plunged by 25 percent in after hours trading to $11.02 per share after the company's preliminary results were released. This is a new low for GoPro, which has seen its stock fall by almost 90 percent from its peak of $93.85 per share in October of 2014.

The bigger problem for GoPro, however, is the possibility that the action camera market has already reached its apex, and if so, the company would have to diversify to find other possible streams of revenue. The company is already doing so with the confirmed development of a camera drone named Karma, which will support 4K video and virtual reality.

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