Roku stock soared higher on Wednesday after the streaming service announced it would lay off 10% of its workforce – about 300 people – in an effort to cut costs.
Roku said that in addition to the layoffs, it would slow its pace of hiring, consolidate office space, reduce its outside services and perform “a strategic review of its content portfolio” to save money, in a regulatory filing with the Securities and Exchange Commission.
Shares of Roku (ROKU) surged more than 10% on the news.
This is Roku’s third round of layoffs in under a year. The company cut 200 jobs in both March 2023 and in November 2022, respectively. The company expects to incur restructuring charges of $45 million to $65 million.
But even as it eliminates the positions of hundreds of workers, Roku said it would bring in more money than it previously expected. The company’s new third quarter forecast anticipates revenues between $835 million and $875 million (excluding the restructuring charge), up from previous estimates of $815 million.
In a recent letter to shareholders, Roku executives expressed worry over an economic environment that “continues to create uncertainty” and warned that the writers and actors strikes in the US would hurt media and entertainment spending.
The Writers Guild of America, which represents more than 11,000 writers working on movies and shows for the nation’s leading studios and streaming services, has been on strike since May 2. SAG-AFTRA, which represents about 160,000 actors, joined the writers on strike on July 14. There has been little sign of progress between the two sides since the strikes started.
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