Roku To Lay Off 10% of Staff in New Cost-Cutting Effort
Roku said it will lay off 10% of its staff in a new round of cost-cutting.
In addition to reducing headcount, Roku said it will cut expenses by consolidating office space, reducing outside services expenses and limiting new hires.
The streaming company also said it will be conducting a strategic review of its content portfolio. Like other media companies, it plans to remove content now available on its streaming platforms.
Roku previously laid off 200 staffers in March, about 6% of its headcount. The new round of layoffs is expected to be completed by the end of the year.
Also Read: Roku Shares Surge on 11% Q2 Revenue Spike
Roku said it expects to take an impairment charge of $160 million to $200 million related to its decision to stop using certain office facilities.
The company will also take a charge of $55 million to $65 million in connection with removing licensed and produced content from its streaming platform.
In addition, there will also be a charge of $45 million to $65 million in connection with the staff layoffs, including severance and benefits.
Excluding the restructuring and impairment charges, Roku said it expects third-quarter revenue to be between $835 million and $875 million with an adjusted EBITDA loss of $20 million to $40 million.
A year ago in Q3, Roku reported revenue of $761 million and a loss in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $34.4 million.
The cuts should translate into higher earnings in 2024, Wells Fargo analyst Steven Cahall said.
“We think implied adjusted EBITDA could exceed $300 million for ‘24,” Cahall said.
