Author: Kathryn

Roku to lay off 200 employees amid slowdown in audience

Roku to lay off 200 employees amid slowdown in audience

Roku to cut 200 U.S. jobs, citing weak ad market

Roku to cut 200 U.S. jobs, citing weak ad market

SAN FRANCISCO (MarketWatch) — Roku Inc. said it will lay off 200 employees amid a slow news cycle that has fueled a decline in its audience.

The move comes as Roku’s shares have slumped nearly 14% in the last year, while Netflix Inc. has risen 14% in that time.

Roku’s total operating revenue fell 2% to $3.9 billion in the first quarter, and its core business showed a drop of 10%, Roku said Tuesday.

Roku has struggled lately to grow its audience outside of the U.S., in a world in which Netflix now rules the roost. It said U.S. subscribers declined 18% in the quarter for companies with fewer than 5 million subscribers.

“Without changing our core business, we felt it was necessary to adjust our team structure to better support the pace of change we have experienced in the past few quarters,” Roku CEO Anthony Wood stated in a statement.

In addition to the 200 job cuts, Roku plans to “lay off a significant number of associates in the near future,” the company said.

Citi analyst Doug Anmuth noted that, which is working on a Roku-powered television, is said to have added more than 100,000 Roku customers since the technology was announced. He believes that could also be “a concern for Roku.” began selling the Roku box in November of last year, and has since grown the market share to around 85% “to the point where there is significant risk to Roku,” Anmuth said in a research note.

Amazon has also worked on its own set-top box for connected televisions, which it said will be available in January.

“The trend is accelerating, and we are very concerned about the market share for the technology,” Anmuth said.

If Roku is unable to find a new partner or new advertising partners to carry its live TV service, it could face a second round of layoffs, he said. “In this case, the key to continued growth is to find a partner that can support a new set-top box.”

Roku shares were down 6

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