Roku lays off 300 workers and removes streaming content to save money
The company’s also consolidating office space and reducing related expenses.
Roku looks to be seriously tightening its pursestrings. The company’s laying off a full ten percent of its workforce, over 300 employees, in addition to a conducting a number of other cost-cutting measures, as reported by Variety. These job cuts are just the beginning, as Roku’s also removing streaming content, consolidating office space and reducing outside service expenses. The goal here is a major reduction in the year-over-year operating expense growth rate.
The company hasn’t announced which content it would be removing from its various streaming platforms and whether or not these cuts would be culled from third-party providers or from in-house projects like the recently-released Weird Al biopic. Roku’s so serious about these cuts that it’s willing to pony up $65 million for impairment charges after deleting this content, according to an SEC filing. Additionally, the company’s planning on forking over $45 million to $65 million to supply outgoing employees with severance benefits and up to $200 million for abandoning office space.
The stock market, as usual, loved the layoffs and related austerity measures, with Roku’s stock rising nine percent in the wake of this news, before settling down to a more modest increase of around four percent. As of this writing, the stock price is still fluctuating.
This is Roku’s third round of job cuts in less than a year. Back in November, it laid off 200 staffers, with 200 more let go in March of this year. That’s a grand total of 700 pink slips, representing around 25 percent of the total workforce. As expected, the company also announced that it's holding off on new hires for the time being.
After this round of restructuring and affiliated impairment charges, Roku hopes for an increase in Q3 net revenue to $835 to $875 million, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the negative $20 million range, up from negative $40 million. However, even Roku admits these figures are uncertain, noting in a Q2 letter to shareholders that the “macro environment continued to create uncertainty,” given the ongoing WGA and SAG-AFTRA strikes.
