Roku plans to lay off 10% of its workforce, and shares jump

Roku said it will lay off 10% of its workforce, or about 360 people, as the streaming software company looks to cut expenses.

in Regulatory fileg The company said on Wednesday that the cost-cutting measures aim to reduce the growth rate of operating expenses on an annual basis.

The company added that it expects adjusted third-quarter revenues to range between $835 million and $875 million, compared to previous expectations of $815 million. Additionally, Roku raised its third-quarter guidance for adjusted EBITDA to a range of negative $40 million to negative $20 million compared to the previous estimate of negative $50 million.

Shares of the San Jose, California-based company rose 10% in early morning trading before giving up some of those gains.

The layoffs are part of a range of cost-cutting measures the company will take. Other measures include consolidating office space, slowing the pace of new hiring and cutting outside services expenses.

Roku expects impairment and restructuring charges in the third quarter to be $330 million, including a range of $160 million to $200 million related to office facilities, and $45 million to $65 million related to job reductions.

Furthermore, Roku said it expects an impairment charge of between $55 million to $65 million related to the removal of existing licensed and produced content on its streaming TV platform, as part of a “strategic review of its content portfolio.”

Roku expects the layoffs to be mostly completed by the end of the fiscal fourth quarter. The company had 3,600 full-time workers as of December 2022, according to FactSet.

This is Roku’s third round of layoffs over the past year as it pulls back after a period of investment. The company laid off about 200 employees in March and another 200 in November.

On CNBC’s “Squawk on the Street,” Jim Cramer said layoffs and other cost-cutting measures would help the company focus toward profitability and attract additional investors.