Digital streaming device maker Roku is planning yet another round of layoffs and will slow down on hiring as part of cost-cutting efforts, it has said.
The San Jose, California-based company announced the new layoffs in a Sept. 5 regulatory filing with the Securities and Exchange Commission (SEC).
After evaluating its operations, Roku “determined to implement additional measures to continue to bring down its year-over-year operating expense growth rate” including by “slowing its year-over-year headcount expense growth rate through a workforce reduction and limiting new hires, among other measures” the company said.
The layoffs are expected to impact approximately 10 percent of the company’s employees, and it expects to incur “restructuring charges” of $45 million to $65 million related to the job cuts, Roku said.
Roku expects that the majority of the restructuring charge will be incurred in the third quarter of fiscal 2023.
Roku had 3,600 full-time workers in 14 countries as of Dec. 31, 2022, according to its annual report.
“The Company further anticipates that the implementation of the workforce reduction, including cash payments, will be substantially complete by the end of the fourth quarter of fiscal 2023,” officials said.
Along with layoffs and a hiring freeze, Roku also plans to consolidate office space, reduce its outside services, and perform “a strategic review of its content portfolio” including removing select licensed and produced content from its streaming platform, the company said, without providing further details as to which content would be removed from its various streaming platforms.
3rd Quarter Revenue Expectations
Roku expects to record an impairment charge of $160 million to $200 million for the office consolidation and a $55 million to $65 million loss for the streaming reduction.
The latest announcement marks the third round of layoffs at Roku in less than a year. In March, the company said it would lay off another 200 workers, or 6 percent of its workforce, after slashing 200 U.S. positions in November 2022.
Roku follows in the footsteps of other tech giants including Spotify, Microsoft, Amazon, and Meta who have struggled with slowing revenue in recent months after seeing a surge in profits during the COVID-19 pandemic, when millions were forced to stay at home.
Recession fears have also prompted layoffs and cost-cutting measures.
Roku began posting quarterly losses in 2022 and in July of this year revealed a $107.6 million loss.
At the time, the steaming giant said that TV advertising “remains muted industry-wide” but stressed it was well-positioned to accelerate growth as advertising recovers.
Despite the job cuts, Roku said in Wednesday’s regulatory filing that it expects adjusted third-quarter revenue of between $835 million and $875 million (excluding the restructuring charge), surpassing Wall Street estimates of $828.6 million.
However, the company also expressed in a Q2 letter (pdf) to shareholders that the “macro environment continued to create uncertainty,” amid the ongoing Writers Guild of America and the Screen Actors Guild and American Federation of Television and Radio Artists strikes, which began in May and July, respectively.
Roku’s stock was up nearly 3 percent following the latest announcements at $86.19, but shares are still down more than 80 percent from their peak in 2021.
The Associated Press contributed to this report.
From The Epoch Times