Roku to Cut 6 Percent of Workforce as Tech Layoffs Rise Over 60,000 So Far in 2023

A video sign displays the logo for Roku Inc., in New York, on Sept. 28, 2017. Brendan McDermid/Reuters

Roku, the digital streaming device maker, announced another round of layoffs, as the number of job losses in the tech industry rises over 60,000 in 2023.

The company said it would lay off another 200 workers, or 6 percent of its workforce, in a Securities and Exchange Commission (SEC) filing on March 30, a few months after cutting 200 U.S. positions in November 2022.

The San Jose, California-based firm, like others in the streaming service industry, saw a surge in revenue during the pandemic, when millions of Americans were locked indoors and were forced to rely on in-home entertainment.

People stuck at home started make more use of delivery services like e-commerce and virtual communications platforms such as social media services and videoconferencing.

However, as the lockdowns subsided, many customers gradually returned to their old entertainment habits, causing a financial new challenge as revenue began to plunge.

Major technology giants such as Meta and Amazon.com led the way in layoffs in the sector, as they braced for a potential economic downturn and interest rates surge worldwide.

Job cuts in U.S. tech sector hit 63,000 in the first two months of the year, according to data from Challenger, Gray & Christmas Inc.

Roku Sheds Jobs and Office Space to Save Costs

Roku, which had about 3,600 full-time employees as of Dec. 31, 2022, described the new round of layoffs as part of its “restructuring plan.”

The plan aims to “lower the company’s year-over-year operating expense growth and prioritize projects that the company believes will have a higher return on investment,” the government filing said.

The company also decided to sell and sublease an unspecified amount of unused office space that it did not currently occupy in a bid to lower expenses.

The 200 job cuts will cost the digital device maker between $30–35 million in severance payouts and other employee benefits, according to the SEC filing.

Most of the restructuring costs will be incurred in the first quarter of fiscal 2023, while the layoffs will be completed by the end of the second quarter.

Company Says It Still Has Enough Funds Through the Year

The streaming device maker warned at the end of last year of a future difficult business environment due to a slowdown in advertising spending and the rising costs of inflation.

The firm’s revenue has stood essentially unchanged over the last three months of 2022 compared with the year-ago period, according to an earnings report released in February.

Roku had $1.9 billion in cash and equivalents on hand as of March 10, according to a regulatory filing earlier this month, and said it had enough funds to meet its needs for the next 12 months and beyond, reported Bloomberg.

Meanwhile, about $487 million, or 26 percent of the company’s liquidity, was held in deposits by Silicon Valley Bank, which suddenly failed in early March.

Shares of Roku tumbled 3.93 percent by the early afternoon on March 30.

Reuters contributed to this report.