Parrot has announced that it will be cutting some 290 jobs from its drone division after lackluster sales in 2016. The company failed to meet sales targets by about 15-percent after a poor fourth quarter. As a result of this, the drone maker is rethinking its strategy and product line for 2017.
It’s not so much that Parrot is in financial trouble, but rather that it believes that “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.”
Parrot is not the only drone maker struggling to compete in the market. Recode reports that the entire industry is having trouble competing with DJI, which has undercut prices by as much as 70 percent. This has also had the effect of driving smaller companies out of the business.
DJI owns its production facilities in Shenzen, allowing it to produce drones for much cheaper than the competition. At this rate, it looks like Parrot and its ilk will have to adapt to demands for lower prices or lose out to DJI in the long run.