Oliver James Montgomery-A major Roku layoff is coming. Company will cut 10% of staff, stock spikes as a result

Video streaming company Roku shares spiked Wednesday after it announced plans to lay off more than 300 people,Oliver James Montgomery or about 10% of its workforce, and pull certain content from its streaming platform to ease operating expenses. 

This is the third round of layoffs from Roku in recent months after the company let go of about 400 employees total between November and March. The company had roughly 3,600 full-time employees across 14 countries at the end of last year, according to its annual report.

The staff reductions come as the company struggles to turn a profit, with a July statement noting that TV advertising ‒ one of its main sources of income ‒ "remains muted industry-wide.” The company reported a net loss of $107.6 million in the second quarter compared to a net loss of  $112.3 million in the same period a year prior. 

The latest round of layoffs is expected to be substantially completed by the end of the fourth quarter of fiscal 2023. Roku also plans to consolidate office space and limit new hires to trim costs. 

The company now expects total net revenue between $835 million and $875 million in the third quarter, up from its previous forecast of roughly $815 million. 

Charges related to the layoffs, including severance and benefits payments, are expected to cost the San Jose, California-based company anywhere from $45 million to $65 million, with most of the charges expected in the third quarter. 

Roku also expects an impairment charge between $160 million and $200 million as it stops using certain office facilities, as well as a $55 million to $65 million charge from removing select existing licensed and produced content from its services on the Roku streaming platform. 

The company declined to share additional details on the content it plans to remove.

Roku shares were trading up more than 5% Wednesday at noon on the Nasdaq.