Roku cuts staff to control operating expenses growth rate

Roku, often one of the most bullish voices in the emerging streaming market, has issued a statement saying it is cutting staff to combat the worsening economy.

It said: “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 operating expenses growth rate. 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 has continued to make a steady stream of announcements about new products, new territories and additions to its flagship Roku Channel in recent weeks. But it did give some hint of what was to come in its recent results presentation when it said: “As we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market. We therefore anticipate Q4 revenue and revenue to be lower year over year. Our significant Q3 OpEx (operating expense) YoY growth was largely the result of robust hiring in late 2021 and early 2022 when we believed that the economy was emerging out of pandemic-related disruptions, and we were accelerating investments that we had previously deferred. We started taking steps to significantly slow the rate of hiring and other OpEx growth in late Q2, however, it will take a few more quarters for this YoY OpEx growth rate to normalise. We will continue to slow headcount and OpEx growth in response to the macro environment, while continuing to make disciplined investments in our most strategic projects.”

Roku, of course, isn’t alone. Warner Bros Discovery, Disney, Paramount+, Meta, Twitter and Amazon have all either cut staff or are poised to do so.