Streaming hardware maker Roku says it will lay off around 10 percent of its global workforce as part of a broader cost-cutting strategy intended to help reign in spending.
The layoffs were first announced in a filing with the U.S. Securities and Exchange commission on Wednesday, and will impact around 300 of its 3,600 employees. Roku will also slow new hiring and consolidate some of its offices in an effort to curb costs.
The workforce reduction will see Roku spend between $45 million and $65 million during the current quarter, mostly to address severance payments and post-employment benefits for affected employees. Additionally, Roku says it expects to incur an impairment charge of $160 million to $200 million related to its office consolidations.
Roku also will remove some content from its streaming platform, specifically the free, ad-supported streaming service the Roku Channel, though it wasn’t clear which shows or movies are being considered as part of this plan. The strategy aligns with similar moves made by rival media firms, including Warner Bros Discovery and the Walt Disney Company, who have removed TV shows and movies from their services over the past year.
For years, Roku generated the bulk of its revenue from the sale of hardware streaming players, which included a line of Roku-brand streaming pucks and sticks. In recent times, Roku has shifted its revenue model to include licensing its Roku streaming operating system to third party TV manufacturers like TCL and Hisense, and through advertising placed on its home screen and against content in the Roku Channel.
In July, Roku said its platform business brought in $744 million during its second financial quarter of the year, accounting for the bulk of its $847 million earned that quarter. Monthly active users of Roku’s platform increased to 73.5 million, reflecting a quarterly bump of 2.6 percent and 16 percent higher compared to Q2 2022.
Meanwhile, its hardware division logged a $17.6 million loss during the same quarter as Roku continues to invest money in its operating system and streaming hardware, which includes a new line of its own Roku-branded TV sets.
Executives said strong consumer demand helped deliver “solid results in Q2,” particularly in overseas markets like Latin America and parts of Europe, where Roku has started to market more of its streaming hardware.
But expenses have started to catch up with Roku, with the company now saying it is “determined to implement additional measures to continue to bring down its year-over-year operating expense growth rate.”
It is at least the third time Roku has looked to layoffs in order to bring down costs over the last 12 months. In November, Roku announced it would trim its global workforce by 200 positions; four months later, it announced an additional round of layoffs impacting 200 more workers.