Parrot pivots to prosumer devices amid layoff of 290 staff
French drone maker Parrot is to lay off 290 employees after it missed Q4 sales targets by around 15%. The company plans to pivot from low-margin consumer drones to prosumer-level devices. Key competitor China's DJI has impacted profit margins in the consumer sector by cutting prices and was cited by American company 3D Robotics as a reason for switching from hardware to drone software and navigation.
It was a disappointing holiday season for French drone maker Parrot. The company announced Monday that it will lay off about 290 employees -- or more than a third of the employees currently working on drone-related projects -- after it missed fourth quarter sales targets by about 15 percent.

Parrot's drone line has always straddled the line between executive toys and high-end gadgetry, and according to the company's announcement, the first order of business in 2017 will be to refocus its product offerings to concentrate on the most profitable areas. Parrot cites extremely low margins in the consumer drone space as the main reason for the layoffs, so we won't be surprised if we see fewer one-off jumping, flying and seafaring minidrones as the company continues to grow up with more prosumer-level devices like the Bebop 2 or the fixed-wing Disco in the future.

As Recode notes, Parrot's main competitor DJI has been dominating the consumer drone space by slashing prices and cutting into profit margins, which it can pull off because it also owns the manufacturing facilities in Shenzhen. American company 3D Robotics blamed DJI's pricing when it bowed out of the hardware game to focus on drone software and navigation instead. In Parrot's case, however, the company also has a range of audio products and "connected garden" smart flower pots to help out that bottom line.