ROKU narrowed its adjusted operating loss forecast for the third quarter and said it would lay off 10 per cent of its staff as well as cut down on some office space, sending the company’s shares more than 8 per cent higher in premarket trading on Wednesday (Sep 6).

Roku also raised its quarterly revenue forecast, a sign that ad spending was continuing to improve thanks to cooling inflation and hopes of a pause in interest rate hikes.

The streaming device maker, which has its own ad-supported channel, had in February said it aims to turn a profit in 2024 as it strives to drastically cut costs.

Roku, which faces pressure from larger streaming firms, had laid off about 400 employees, in two cycles in March and November.

The company had about 3,600 full-time employees as of December, but declined to share the latest figure.

The San Jose, California-based company now expects adjusted core loss in the range of US$40 million to US$20 million for the quarter ending September. It forecasts total net revenue to be between US$835 million and US$875 million.

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The company had earlier projected total net revenue at US$815 million and adjusted core loss at US$50 million for the period.

Roku also said it would consolidate offices, reduce expenses on outside services and review its content portfolio.

It expects to take on US$160 million to US$200 million in impairment charges related to closure of some offices and US$55 million to US$65 million related to removing select existing licenced and produced content from Roku-operated services on its TV streaming platform.

Roku would also take a US$45 million to US$65 million charge in connection with the workforce reduction, expected to be completed in the fourth quarter.

All charges would be recorded in the third quarter. REUTERS