Streaming hardware maker Roku says it will cut around 200 jobs in the United States as the company seeks to reduce operating expenses.
The reduction comes as media companies have struggled with a pullback in spending by advertisers due to economic uncertainty going into the holiday season and beyond.
Roku says the job losses will represent about 5 percent of its workforce. The company expects the reduction will cost it between $28 million and $31 million as Roku offers severance packages and limited-run benefits to affected employees.
Less clear is where Roku is cutting its headcount. The company has a variety of business sectors, including hardware, media and advertising. It recently entered the Smart Home market with a line of Roku-branded surveillance cameras, doorbells and smart lights that are manufactured by Wyze. Roku has also been an aggressive buyer of content as it builds up the Roku Channel, its free, ad-supported streaming TV and movie service.
Roku recently revealed a slight decline in revenue for its platform and ad business, which saw $670 million in revenue last quarter, down from $673.2 million reported in the prior financial quarter. Roku continues to grow its user base, with over 65.4 million streamers using the platform, putting its market dominance on par with devices powered by Amazon’s Fire TV operating system.
In a letter to shareholders, Roku warned that the upcoming holiday season would see consumers spend less on streaming products. That, coupled with a pullback in ad spending by major companies, is expected to have an impact on its bottom line.
Roku is certainly not alone in this situation: This week, the Wall Street Journal reported Amazon was trimming its workforce by upward of 10,000 employees. Like Roku, Amazon said the headcount reduction was part of a broader effort to bring expenses under control. Some of those job losses related to smart devices and the development and maintenance of Amazon’s smart personal assistant, Alexa, according to people with knowledge of the move.