Roku to cut 200 U.S. jobs, citing weak ad market
Roku, the world’s biggest maker of streaming video products, said it plans to cut more than 200 positions in the U.S. following a slide in the video ad market over the past year.
The job cuts were announced on Tuesday by Roku, a subsidiary of China’s Enlight Media Group. The company expects to make its first reduction of positions since 2015. Roku said the company will close eight of the 18 open U.S. offices in 2017. The new positions will be mainly at Roku’s Roku Business, Roku TV and Roku Streaming Devices division.
Roku is a market leader in streaming and video advertising and devices, and it has also begun to diversify into software like the Roku Channel software. But the company has struggled with its advertising business. The loss of the Roku Channel in 2015 was a signal to advertisers that Roku was struggling.
Roku said it would reduce the number of video ads Roku displays on its streaming devices by 70 percent, or roughly 30 million, between January and March to align with the declines in the market and to reduce the company’s ad cost.
“We need the right partner that will continue to support our strategy to evolve Roku and we continue to seek ways to provide value to our customers,” said Roku CEO Jamie Siminell in a statement, which came at the end of a company earnings call on Tuesday with analysts following.
Roku’s ad business is a significant revenue stream. Roku reported $1.3 billion in subscription revenue last quarter, down from $1.6 billion in 2014.
The company also reported $5.3 million in net income on its fourth-quarter 2015, a significant improvement for a stock hit with a steep decline in 2015. Roku had warned last year that it could miss the $1.75 earnings per share analysts were forecasting. Roku’s current projected 2016 earnings are $1.90 per share, well below