Connected television technology developer Roku will sublease at least two of its Northern California offices as the company seeks to reduce expenses.
The two office buildings are located near an airport in San Jose, a community in the Santa Clara Valley of the San Francisco Bay Area, where Roku has a sprawling campus.
The plan is part of a reduction in expenses announced by Roku earlier this month, in which it affirmed the company expected to take a $160 million to $200 million impairment charge related to plans that would see a reduction in the amount of office space it used.
The total real estate associated with the sublease clocks in at around 357,000 square feet, according to listings from a commercial real estate firm that is working on behalf of Roku. Both offices are located on Coleman Avenue; one of them is owned by Roku, but has never been used by the company.
Local real estate experts say the office space could be quickly snatched up by other technology companies that are hiring in the area, especially those with roots in similar media ventures as Roku.
ByteDance, the Chinese parent company of TikTok, has been on a hiring spree in the local area, and could sign a lease for one or both office buildings as it looks to staff up in the San Francisco Bay Area, according to some speculators. Snap, the Southern California-based developer behind SnapChat, is also reportedly exploring ways to return to the Bay Area after it closed an office in San Francisco last year.
Any new tenant could breathe fresh life into Roku, which has struggled to offset a downturn in hardware-related revenue as adoption of its streaming television devices have flattened in recent months.
Over the past few years, Roku has shifted its focus toward its connected television platform, which includes advertising inventory sold against the home screens of Roku devices, subscription sales to third-party streaming services and advertising in its free, ad-supported streamer The Roku Channel. Of the $847 million in revenue attributed to the company last quarter, the majority — $744 million — was attributed to its platform business.
That revenue wasn’t enough to cover the amount Roku has invested in developing new technology and associated hardware for its streaming set-top boxes, sticks and Roku TV sets. As it looks to invest even more money in developing its hardware and operating system, Roku has come up with a plan to cut from other parts of its company in order to offset costs.
Since last November, Roku has laid off hundreds of employees across various parts of its business, with the latest impacting around 300 of its 3,600 staff members. Earlier this month, Roku said it would also slow down new hiring in order to cut down on worker-related expenses.