Roku Rocks on Cost-Cutting Measures: ETFs in Focus

Roku ROKU, a key player in the streaming industry, witnessed a surge of about 3% in its stock on Wednesday. This surge followed the company's announcement of a series of cost-cutting measures, including workforce reductions, in a concerted effort to reduce operating expenses.

Workforce Reductions and Hiring Slowdown

In a regulatory filing unveiled on Wednesday morning, Roku disclosed its plan to streamline its workforce by eliminating 10% of its employees, equating to approximately 300 jobs. Additionally, the company announced a deceleration in its pace of hiring, as quoted on a Yahoo Finance article. This marks Roku's third round of layoffs in less than a year, with prior cuts of 200 jobs in both March 2023 and November 2022.

Upbeat Financial Projections

Roku's cost-cutting measures have already started yielding results in terms of its financial projections. Excluding charges related to severance and select content removal from its streaming platform, the company now anticipates third-quarter net revenue in the range of $835 million to $875 million, accompanied by adjusted EBITDA in the range of negative $40 million to negative $20 million. This outlook surpasses its previous third-quarter forecast, which projected revenue at approximately $815 million and adjusted EBITDA at negative $50 million.