Roku stock rises on plan to cut 10% of workforce and limit hiring

Roku is shedding about 10% of its workforce, or 360 employees, and will limit new hires as it cuts costs to stem a string of quarterly losses.

The streaming platform also said in a regulatory filing on Wednesday that it expects third-quarter adjusted revenue to be between $835 million and $875 million, much better than Wall Street’s forecast of $828.6 million , according to analysts polled by FactSet.

Shares, which have already doubled year-to-date, rose as much as 8% before closing at $86.19, up 3%.

Roku anticipates a $45 million to $65 million restructuring charge related to the job cuts.

The charge will primarily consist of severance and employee benefits, with the majority of the charge expected to be incurred in the fiscal third quarter.

The Silicon Valley company also expects to incur an impairment charge of between $160 million and $200 million in the third quarter as it consolidates some operations.

An impairment charge of between $55 million and $65 million is expected for the removal of certain existing licensed and produced content from Roku-operated services on its TV streaming platform.

Based in San Jose, California, the company employed 3,600 full-time employees in 14 countries as of December 31, 2022, according to its annual report.

Roku expects the job cuts to be largely complete by the end of the fiscal fourth quarter.

After a string of profitable quarters during the pandemic, Roku has suffered a string of quarterly losses that began in 2022.

The company said in late July, when it posted a $107.6 million loss, that TV advertising “remains subdued across the industry” but is well positioned to accelerate growth as advertising recovers.

The tech industry has seen a spate of layoffs after recruiting went into overdrive during the pandemic.