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Roku’s Stock Jumps After It Declared To Lay Off 10% Of Its Employees
Roku, the famous streaming company, announced on Wednesday that it will lay off 10% of its employees, which amounted to around 360 individuals. The company also cut its employee count by 200 in March and once more in November last year.
The streaming company is looking to slash down its expenses. Apart from that, the company also declared various cost-cutting measures, in addition to raising its guidance for its revenue in the third quarter and EBITDA. The goal is to lower the year-over-year operating expense growth rate.
According to CNBC,
?The company added that it expects adjusted third-quarter revenue of between $835 million and $875 million, up from a prior forecast of $815 million. In addition, Roku raised its third-quarter guidance for adjusted EBITDA to a range of negative $40 million to negative $20 million compared to a prior estimate of negative $50 million.?
After it declared about laying off employees on Wednesday to lower its expenses, its shares rose 3% in value. The company is on a mission to cut its costs and hence is taking such steps. Furthermore, it is slowing the pace of hiring and also considering consolidation of its office space. The company is also trying to reduce its outside service expenses.
Roku is expecting that its impairment and restructuring charges for the third quarter will be up to $330 mn. This includes $160-200 mn for office facilities and $45-30 mn for issues related to layoffs. Apart from that, there are other impairment expenses of $55-65 mn for removing some existing licensed and produced content on its streaming platform.
With these steps, the company is hoping to increase its profitability and attract more investors.
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