Following the mass layoffs of staff by companies in Silicon Valley, Roku has announced that it is cutting its employees by 200, affecting around 7% of its workforce.
In a statement, the company said that the workforce reduction was made to lower its headcount expenses by about 5% to spend less on operations in the challenging economic conditions.
The Economic Decline In The Advertising And Tech Industries Pushed Roku's Layoffs
According to Engadget, the streaming service company is looking to reduce its employee headcount as Roku anticipates a revenue decline for Q4.
The company says that the layoffs are happening and will be completed by the end of Q1 2023, and it estimates to pay between $28 and $31 million for severance payments and employee benefits contributions.
"Taking these actions now will allow us to focus our investments on key strategic priorities to drive future growth and enhance our leadership position," Roku says in a statement.
However, this harsh change was unexpected as the company's Q3 earnings report even stated that the rise in employment at Roku means it is emerging from pandemic-related setbacks.
With this, the shareholder letter even pitched that the company should instead slow down on its hiring rather than fire employees, The Verge writes.
Roku has also warned its investors about the rocky path of the company in Q2 as well, when it started selling fewer streaming boxes, hurting its revenue.
Due to this, the company best known for its streaming sticks and boxes has pivoted into being more of an ad-supported streaming platform business recently, The Hollywood Reporter notes.
The streaming company expanded by offering original content and launching a line of smart home products which was done through a collaboration with Wyze.
Despite the efforts Roku has done to steady its revenue, they were not enough to keep all of the company's employees as a wave of layoffs hit the tech industry, according to The Verge.
As of December 31 last year, the company recorded about 3,000 full-time employees in 13 countries including the US, Variety reports.
Read More: Amazon Plans To Cut Thousands Of Employees In Sweeping Layoffs
The Threat Of Economic Recession Leave Thousands Of Tech Industry Workers Jobless
Roku is the latest technology and media company with a significant advertising business to cut back on workers in what is becoming a more challenging macroeconomic environment.
Because of this, big tech companies' job cuts have become an unfortunate trend in recent months, affecting a huge portion of the industry's workforce.
In the past weeks, Meta downsized its staff headcount by 11,000, while Twitter has cut 3,800 jobs even before the 50% employee layoffs once Elon Musk successfully bought the company.
Warner Bros. Discovery, Netflix, Paramount Global, Amazon, Snapchat, and Spotify also implemented major layoffs recently, according to Tech Crunch.
In addition, industry giants like Apple and Disney put their corporate hiring into a freeze, continuing until 2023 due to the double challenges of the post-pandemic and economic uncertainty.
Related Article: Intel Confirms It is Laying Off Workers in Operations, Sales Departments
