Roku to lay off 200 US employees after advertising revenue sinks
Roku's stock has declined by nearly 80% in 2022
Needham & Company senior internet analyst Laura Martin shares her outlook for the stock market and gives advice on investing.
The television streaming platform Roku is set to remove 200 job positions in the United States following the slowdown of the economy.
Roku is following in the path of other technology firms such as Amazon, Netflix and Meta by laying off employees after a poor third-quarter earnings report.
The company's poor financial performance was attributed to a softening of advertising revenue for streaming platforms. Roku's stock plummeted in 2022, declining by nearly 80% so far this year.
Persistent record high inflation, along with a high cost of living, has affected the advertising budgets for companies Roku once relied on for revenue boosts. A similar revenue loss was seen in third-quarter earnings for other streaming platforms, including YouTube.
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Roku announced on Thursday that it plans to eliminate 200 jobs in the United States after poor company earnings. (iStock / iStock)
"Due to the current economic conditions in our industry, we have made the difficult decision to reduce Roku’s headcount expenses by a projected 5%, to slow down our OpEx growth rate," Roku said in a company statement on Thursday.
"This will affect approximately 200 employee positions in the U.S. Taking these actions now will allow us to focus our investments on key strategic priorities to drive future growth and enhance our leadership position," the company added.
The recent layoffs account for about 7% of Roku's overall workforce. Last year, the company had nearly 3,000 employees on its payroll, operating across the globe in 13 countries.
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News of the downsizing caused Roku's shares to decline by over 3% during pre-market trading on Thursday morning.
According to an SEC filing, Roku claims the layoffs will result in approximately $28 million to $31 million in charges for severance payments and employee benefits contributions.
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