Netflix terminates more than 200 employees in second wave of employment cuts
The move primarily impacted the US workforce after the company cut 150 jobs last month.
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FollowNetflix Inc said it laid off 300 employees, or about 4 per cent of its workforce, in the second round of cost-cutting measures after the streaming giant lost subscribers for the first time in over a decade. The move primarily impacted its US workforce after the company cut 150 jobs last month.
Netflix, in its statement, said on Thursday, "While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth."
Inflation, the Ukraine war, and fierce competition have weighed on subscriber growth at the world's dominant streaming service in recent months. Following the drop in subscribers in the first quarter, Netflix has forecast even more significant losses for the current quarter.
To halt the downward trend, the company intends to launch a lower-cost, ad-supported subscription tier, for which it has talked with several companies.
"While we continue to invest heavily in the business, we made these adjustments to align our costs with our slower revenue growth," a Netflix spokesperson stated in an email. They are also incredibly grateful for everything employees have done for Netflix and are working hard to support them during this challenging transition.
Netflix is retooling its operations after 200,000 subscribers left during the first quarter of 2022, upending the company's subscription-based revenue model. The difficulties have dragged down the company's stock price and harmed employee morale.
In addition to the layoffs in May, Netflix laid off some contract workers and editorial staff from its Tudum site in April as part of a marketing budget reduction.
A price increase in January contributed to Netflix's subscriber problems. It also faces increased competition from streaming services like Hulu, Walt Disney Co., and Amazon.com Inc., which recently reported increased subscriber numbers.
According to co-CEO Ted Sarandos, Netflix Inc. is discussing advertising partnerships with several businesses as the streaming titan tries to halt a decline in subscriber growth by introducing a less expensive plan with ads.
According to media reports earlier this week, it was in talks for potential marketing alliances with Alphabet Inc's Google and Comcast Corp's NBCUniversal.
When asked which company Netflix was looking to partner with, Sarandos said at the Cannes Lions conference, "We're talking to all of them right now."
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