Roku, the streaming platform company, is set to lay off 10% of its workforce – more than 300 employees – as part of its ongoing efforts to cut down costs. The company also plans to remove some of its licensed and owned content from the platform as it conducts a review of its content portfolio. Additionally, the company plans to consolidate office space and cut outside service costs to reduce its expenses.
This will be the third round of job cuts at Roku in less than a year. The company had cut 200 jobs in November 2022, followed by another 200 in March 2023. In addition to the layoffs, the company has also decided to reduce its new hires. As of the end of 2022, Roku had approximately 3,600 full-time employees.
Due to layoffs, Roku is expected to incur expenses of $45 million to $65 million in severance and benefits costs during the current quarter. Furthermore, the company anticipates an impairment charge of $55 million to $65 million as a result of changes made to its content portfolio. Additionally, consolidating office spaces would result in another impairment charge of $160 million to $200 million, says the company in a filing with the SEC.
Roku expects to see an increase in Q3 net revenue to $835 to $875 million following a round of restructuring and associated impairment charges. The company’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) are likely to be in the negative $20 million range, up from negative $40 million.
However, the company notes that these figures are uncertain due to the ongoing WGA and SAG-AFTRA strikes, which have created an uncertain macro environment. In a Q2 letter addressed to shareholders, Roku acknowledged that the strikes have contributed to the uncertainty going on currently.
Roku manufactures streaming boxes and even licences hardware to third-party companies. The company also has a streaming platform, The Roku Channel, which offers ad-supported content, Roku originals, and live TV channels. Users can also subscribe to third-party streaming services.
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