Roku to reduce 10% of workforce

Roku, the TV streaming platform, announced a significant workforce reduction. Roku plans to let go of roughly 10% of its staff, a move affecting over 300 employees. This decision is part of its larger strategy to curtail operating expenses, which have been soaring at an unprecedented rate.

• As of the end of 2022, Roku had a global workforce of approximately 3,600 full-time employees stationed across 14 countries. It's worth noting that the company also instituted a headcount reduction in March, laying off around 200 employees.

• The costs of the layoffs are expected to be hefty. Roku anticipates spending between $45M to $65M on severance and benefits, as well as incurring impairment charges related to changes in its content portfolio and ceasing the use of certain facilities.

• Roku's revenue primarily comes from its platform, which offers a mix of ad-supported content, live TV channels, and subscriptions to third-party premium streaming services. Its focus on streaming advertising has led to it competing with major players like Google and Meta.

• Roku's platform revenue, which includes the sale of digital ads and content distribution revenue shares, constituted the majority of its total revenue in Q2 2023, bringing in $744M out of $847M.

• Despite the impressive revenue growth, Roku reported a net loss of $108M in the same quarter. The company also doesn't anticipate reaching profitability in the upcoming quarter.

Roku's restructuring and downsizing efforts highlight the challenges faced by streaming platforms. As the competition in the digital advertising space intensifies, Roku is adapting its strategies to ensure sustainable growth.