- Roku announces 10% workforce cut to reduce costs.
- Third-quarter revenue forecast rises to between $835M-$875M.
- Layoffs are part of larger restructuring, including content and office space adjustments.
Roku, the streaming giant, is taking some bold financial maneuvers. In a bid to trim the fat from its budget, Roku has announced that it'll be parting ways with 10% of its workforce – that's roughly 360 individuals.
This move isn't just about cost-cutting, though. Roku shared an optimistic update regarding its financial health, anticipating its third-quarter revenue to land somewhere between $835 million and $875 million, showing a significant jump from its previous $815 million forecast. Despite the initial surge in stock prices following the announcement, the figures settled down shortly after.
But let's dive deeper into Roku's financial playbook. The layoffs are just one part of a broader strategy to get its financial house in order. We're talking about consolidating office spaces, taking a breather on new hiring, and being more judicious with spending on external services. With this comes the expectation of some substantial restructuring charges for the upcoming quarter, especially relating to office facilities and the layoffs.
But there's a plot twist. As Roku reshapes its offerings, some content will be retired. Expect an impairment charge of between $55 million to $65 million due to the pruning of certain licensed and produced content from its streaming platform. A strategic move, Roku calls it, as they review the essence of their content portfolio.
If you're counting, this makes it the third time Roku has opted for layoffs within the past year. It's been a journey of reflection and recalibration for the company, following a rather aggressive phase of investment. In March, they bid farewell to 200 staff, and come November, another 200 employees departed.
Now, what's the street saying? Jim Cramer, from CNBC's "Squawk on the Street," sees a silver lining. He believes these financial adjustments and cost-cutting strategies will steer Roku toward profitability, making it all the more enticing for future investors.
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