Streaming device maker Roku plans to lay off 10% of its workforce, amounting to approximately 300 employees, in an effort to reduce costs amid a challenging media and entertainment advertising landscape.
Roku, based in San Jose, California, is facing industry-wide challenges exacerbated by ongoing strikes in the film and television sector. The company has already gone through two rounds of layoffs in the past year, with this being the third.
Cutting Costs and Restructuring Operations
Roku’s cost-saving measures include reducing its office space, removing certain licensed and produced content from its streaming platform, decreasing expenses for outside services, and limiting new hires. The company aims to streamline its operations and improve financial stability.
In addition to the layoffs, Roku expects to incur restructuring charges of $45 million to $65 million. It will also face impairment charges of $160 million to $200 million related to ceasing the use of certain office facilities, as well as a $55 million to $65 million impairment charge for removing content from its Roku-operated services.
Impact on Financials
Despite reporting a net loss of $107.6 million in the second quarter of this year, Roku saw a year-on-year revenue increase of 11% to $847 million. However, the company remains cautious due to macroeconomic concerns and uncertainty.
Recognizing the challenging environment, Roku’s CEO Anthony Wood and CFO Dan Jedda wrote in a shareholder letter in July, “While consumer spend is showing some modest growth, macro concerns and uncertainty remain.”
Future Outlook
Roku expects the workforce reduction to be completed by the end of the fourth quarter. The company is actively adjusting its operations to adapt to the changing industry landscape and is determined to maintain its position as a leader in the streaming device market.
During the pandemic, Roku experienced significant growth in its streaming services and expanded its staff in Santa Monica. However, the layoffs and expense reductions reflect the company’s commitment to long-term sustainability and financial resilience.
As Roku navigates the evolving media and entertainment landscape, it will continue to innovate and adapt its offerings to meet the needs of consumers.