Netflix says it laid off 2% of its staff due to slowing revenue growth and loss of subscribers
Netflix said on Tuesday it had laid off about 2% of its staff in a belt-tightening move after the once booming streaming TV service’s growth slowed.
“These changes are driven primarily by business needs rather than individual performance, which makes them particularly difficult as none of us want to say goodbye to such great colleagues,” a doorman said. speak to AFP.
About 150 employees were laid off, most in the United States, the spokesperson said, adding that Netflix had also cut spending on outsourcing.
The changes came just weeks after Netflix announced it had lost subscribers for the first time in more than a decade.
“The slowing of our revenue growth means that we also need to slow the growth of our costs as a business,” the spokesperson said.
Netflix ended the first quarter of this year with 221.6 million subscribers, slightly less than the last quarter of last year.
The company blamed the quarter-over-quarter erosion on the suspension of its service to Russia due to Moscow’s invasion of Ukraine.
A drop of just 200,000 users – less than 0.1% of its total customer base – was enough to send Wall Street into a panic when Netflix released its quarterly results in April.
Chief Financial Officer Spence Neumann said on an earnings call that Netflix would “reduce” spending for the next two years, while continuing to invest billions of dollars in the platform.
The Silicon Valley technology company reported net profit of $1.6 billion (about Rs 12,409 crore) in the last quarter, compared to $1.7 billion (about Rs 13,184 crore) in the last quarter. same period a year earlier.
Netflix believes that factors hindering its growth include subscribers sharing accounts with people who don’t live in their home.
The streaming giant estimated that while nearly 222 million households pay for its service, accounts are shared with more than 100 million other households paying no subscription fees.
Netflix is testing ways to make money from people sharing accounts, such as introducing a feature that allows subscribers to pay a little extra to add other households.
“When we were growing fast it wasn’t a priority and now we’re working really hard on it,” chief executive Reed Hastings said of account sharing during an earnings call.
“That’s over a hundred million households already choosing to watch Netflix; they love the service, we just have to get paid to some extent for them.”
Another factor holding back Netflix’s growth is intense competition from titans such as Apple and Disney.
Netflix is considering adding a cheaper ad-subsidized subscription tier, a model Hastings had long snubbed.
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