By Emily Bary
Roku joins Meta, Snap, and Twitter in announcing significant layoffs
Roku Inc. plans to cut about 5% of its workforce, or about 200 U.S.-based employees, as it deals with a challenging advertising landscape.
The company is making the move due to "current economic conditions in our industry," Roku (ROKU) announced in a brief statement posted to its corporate newsroom. Roku also intends to slow its rate of operating-expense growth during 2023.
"Taking these actions now will allow us to focus our investments on key strategic priorities to drive future growth and enhance our leadership position," executives said in the statement.
Roku anticipates charges of about $28 million to $31 million related to the job cuts, mainly stemming from severance payments, notice pay, employee benefits, and other costs, according to a filing with the Securities and Exchange Commission. The executives expect to take the bulk of those charges in the fourth quarter of 2022 and said that they expect to be substantially finished with the implementation of the workforce reductions by the conclusion of the first quarter of 2023.
Roku joins numerous other ad-exposed companies in making layoffs. The most notable was Meta Platforms Inc. (META), which announced earlier this month that it would cut more than 11,000 positions, amounting to about 13% of its staff. Snap Inc. (SNAP) conducted layoffs too earlier this year, as did Twitter, which was recently acquired by Elon Musk.
An activist investor recently pushed for Alphabet Inc. (GOOGL)(GOOGL)to eliminate roles as well, writing in a letter to management that the Google parent company "could be operated more effectively with significantly fewer employees."
Roku's layoff announcement comes after the company delivered a weaker-than-expected holiday-quarter forecast in conjunction with its earnings report at the start of the month.
"As we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market," Roku said in a shareholder letter at the time. "We expect these conditions to be temporary, but it is difficult to predict when they will stabilize or rebound."
The stock has lost about three quarters of its value so far in 2022.
(END) Dow Jones Newswires
11-17-22 0833ETCopyright (c) 2022 Dow Jones & Company, Inc.