Shares of Roku Inc. fell Thursday, reversing early gains, after the streaming-media company disclosed that it would lay off 200 employees as part of a cost-cutting plan. The job cuts represent about 6% of the company’s workforce which stood at 3,600 as of Dec. 31, according to the company’s 2022 annual report. The layoffs will be “substantially complete” by the end of the second quarter.
The plan will also result in the exit and sublease, or cease use, of certain office facilities that the company doesn’t currently use, the company said in a filing with the Securities and Exchange Commission before the opening bell. The stock
was down 0.8% in morning trading, erasing an earlier gain of as much as 4.8%. Roku said it expects to record charges of $30 million to $35 million as a result of the plan, which will include severance payments, notice pay, employee benefit contributions and costs for lease exits. Most of the charges will be recorded in the first quarter, which runs through March. After a rough 2022, investors and some analysts have warmed up to Roku’s stock this year, with Susquehanna’s Shyam Patil going as far as saying recently that he believes trends in some ad markets have bottomed. The stock has soared 55.8% year to date, after plummeting 82.2% in 2022. Meanwhile the ARK Innovation exchange-traded fund
has advanced 24.9% this year while the S&P 500
has gained 5.5%.