In a press statement released yesterday, French drone manufacturer Parrot announced that it would lay off more than a third of its drone division employees and reorganize the business, after missing fourth quarter revenue targets.
The maker of the consumer Bebop drone announced that 2016 Q4 revenues had come in at around 85 million euros, widely missing the 100 million target announced in November.
While consumer drones accounted for 49 million of that revenue, “The commercial performance for consumer drones in the fourth quarter was achieved based on margins that would be insufficient to deliver profitable growth for this business over the medium and long term,” says the statement.
The company has outlined a reorganization plan for the business which will shift some focus to commercial drones, and refocus development efforts on “taking a significant technological step forward” by reducing the number of products. In efforts to scale staff to actual business needs, Parrot plans to lay off about 290 employees in the drone division, both in France and internationally.
Parrot says that while the consumer drone business has faltered, the “commercial drone business (mapping / monitoring, agriculture and inspection) has continued to develop. The range of commercial drones, services and solutions has been rationalized and has continued to be further strengthened.” Parrot owns the successful eBee line of commercial drones, a lightweight fixed-wing aircraft designed for industrial and agricultural applications.
Henri Seydoux, Chairman and CEO of Parrot comments: “Parrot is positioned on two highly promising high tech sectors: civil drones and connected cars. By rapidly reorganizing the company I am confident in the excellence of our technological choices and our ability to remain a leader while renewing with sustainable and profitable growth. ”
Seydoux predicted last year that 2016 would be “a bloody year” for drone companies, as manufacturers engaged in price wars to compete. While DJI seems to be growing their stake in the consumer market, Parrot joins US manufacturer 3DR in deciding to shift focus to a more profitable commercial business.