Roku lays off 10% of staff, stock prices rise

Roku said it will lay off 10% of its workforce, or about 360 people, as the streaming software company seeks to cut costs.

In one regulatory FilinG On Wednesday, the company said the cost-cutting measures are aimed at reducing the year-on-year growth rate of operating expenses.

The company added that it expects third-quarter adjusted revenue to be between $835 million and $875 million, up from a previous forecast of $815 million. Additionally, Roku raised its third-quarter adjusted EBITDA guidance to a range of negative $40 million to negative $20 million, compared to a previous estimate of negative $50 million.

Shares of the San Jose, Calif.-based company rose 10% in early morning trade, but then gave back some of those gains.

The layoffs are part of a series of cost-cutting measures the company will take. Other measures include consolidating office space, slowing hiring and reducing the cost of external services.

Roku expects impairment and restructuring charges of up to $330 million in the third quarter, including $160 million to $200 million related to office facilities and $45 million to $65 million related to downsizing.

Additionally, as part of a “strategic review of its content portfolio,” Roku anticipates a $55 million to $65 million impairment related to the removal of select existing licensed and produced content on its TV streaming platform.

Roku expects the layoffs to be largely complete by the end of the fourth fiscal quarter. The company had 3,600 full-time employees as of December 2022, according to FactSet.

This is Roku’s third round of layoffs in the past year as the company scales back after a period of investing. The company cut around 200 employees in March and another 200 in November.

Speaking on CNBC’s Squawk on the Street, Jim Cramer said the layoffs and other cost-cutting measures should help the company return to profitability and attract additional investors.