Roku is laying off another 10 percent of its staff and taking charges for additional restructuring moves, the company unveiled in a regulatory filing on Wednesday.
It cited a “continuing evaluation of its operations” that led it to determine “to implement additional measures to continue to bring down its year-over-year operating expense growth rate by consolidating its office space utilization, performing a strategic review of its content portfolio, reducing outside services expenses, and slowing its year-over-year headcount expense growth rate through a workforce reduction and limiting new hires, among other measures.”
Roku shares jumped more than 10 percent in early Wednesday trading. As of 9:32 a.m. ET, the stock was up 11.2 percent at $93.09.
The workforce reduction is expected to impact approximately 10 percent of the company’s employees, said Roku, led by founder, chairman and CEO Anthony Wood. It also expects to record a restructuring charge related to the workforce reduction, primarily consisting of severance and benefits costs, in a preliminary estimated range of $45 million to $65 million.
The company expects that the majority of the restructuring charge will be incurred in the third quarter of fiscal 2023.
“In connection with the above-described measures, in the third quarter of fiscal 2023 the company expects to record an impairment charge in a preliminary estimated range of $160 million to $200 million related to ceasing to use certain office facilities and an impairment charge in a preliminary estimated range of $55 million to $65 million related to removing select existing licensed and produced content from company-operated services on its TV streaming platform,” the filing said.
Excluding the restructuring and impairment charges, Roku said it now expects its third-quarter revenue to hit $835 million-$875 million, with adjusted earnings before interest, taxes, depreciation and amortization coming in at a loss of $20 million-$40 million.