Roku to Lay Off 10% of Workforce as Company Looks to Reduce Costs

Roku’s Workforce Reduction

Roku, a streaming software company, has announced plans to lay off approximately 360 employees, which accounts for 10% of its workforce. The decision to reduce staff is aimed at reducing operating expenses and improving financial performance.

Financial Outlook

In its recent regulatory filing, Roku revealed that it expects adjusted third-quarter revenue to be between $835 million and $875 million, surpassing its previous forecast of $815 million. The company also raised its adjusted EBITDA guidance for the third quarter to a range of negative $40 million to negative $20 million, compared to the earlier estimate of negative $50 million.

Impact on Stock

Following the announcement, Roku’s stock experienced a 10% surge in early morning trading. However, it later retreated from some of those gains.

Cost-Cutting Measures

Roku plans to implement various cost-cutting actions in addition to the layoffs. These measures include consolidating office space, slowing down new hiring, and reducing expenses related to outside services.

Impairment and Restructuring Charges

The company expects to incur impairment and restructuring charges in the third quarter, amounting to up to $330 million. This includes expenses of $160 million to $200 million related to office facilities and $45 million to $65 million related to the job cuts.

Content Portfolio Review

Roku will also evaluate its content portfolio and remove certain existing licensed and produced content on its TV streaming platform. This review will result in an impairment charge of $55 million to $65 million.

Timeline and Previous Layoffs

Roku anticipates completing most of the layoffs by the end of its fiscal fourth quarter. The company had 3,600 full-time employees as of December 2022. This marks the third round of layoffs for Roku, following previous reductions of about 200 employees in March and another 200 employees in November.

Jim Cramer’s Perspective

Jim Cramer, a commentator, believes that the layoffs and other cost-cutting measures will help Roku pivot towards profitability and attract additional investors.

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Clayton Turner is a news reporter and copy editor for 24PalNews. Born and raised in Virginia, Clayton graduated from Virginia Tech’s Frank Batten School of Leadership and Public Policy and majored in journalism.

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