Roku plans to lay off 10% of its workforce, and stocks are skyrocketing

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

In a regulatory filing on Wednesday, the company said its cost-cutting measures aim to lower the year-on-year growth rate of operating expenses.

The company added that it expects adjusted third-quarter revenue to be between $835 million and $875 million, up from a previous forecast of $815 million. In addition, Roku raised its guidance for the third quarter of adjusted EBITDA to a range of negative $40 million to negative $20 million compared to a previous estimate of negative $50 million.

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

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

Roku expects third-quarter impairment and restructuring charges 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 cuts.

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

Roku expects that the layoffs will be mostly completed by the end of the fourth fiscal 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’s ebbing after a period of investment. The company laid off about 200 employees in March and another 200 employees in November.

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