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Netflix Lays Off Another 300 Staffers Amid Subscriber Decline


Netflix has informed 300 employees that they no longer have a job. The Thursday headcount reduction comes in addition to the 150 staffers who were let go last month. These rounds of layoffs come after the streamer earlier this year reported it lost 200,000 paying subscribers and expects to shed another 2 million subs in the current quarter.

Thursday’s job cuts came across multiple units; most are in the U.S.

“Today we sadly let go of around 300 employees,” a Netflix spokesperson said in a statement provided to IndieWire. “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. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”

The May layoffs also affected largely U.S.-based employees, including some in the executive ranks working on original content. All said, 150 employees were laid off in addition to dozens of contractors and part-timers. Netflix’s workforce is some 11,000 strong.

“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” Netflix said after the May cuts. “So sadly, we are letting around 150 employees go today, mostly U.S.-based. These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues. We’re working hard to support them through this very difficult transition.”

Netflix also laid off at least 10 full-time staffers on April 28 as part of a restructuring of the company’s marketing efforts.

Netflix stock (NFLX) has taken a beating this year, sliding about 50 percent since it announced the Q1 subscriber decline — the first time its user base has shrunk in a decade. Netflix will report its Q2 performance on July 19.

Shares in Netflix opened at $180.50 Thursday. They hit an all-time high in October of over $700.

As a fix, the company has committed to cutting costs in order to keep its margins at 20 percent, which explains the job cuts. But it’s still spending big on content: Netflix is on track to spend $17 billion this year, around the same amount as last year. By comparison, Disney is on track to spend $32 billion on content this year across its streaming, linear, and theatrical properties, up $8 billion from last fiscal year.

Both Netflix and Disney are embracing ad-supported tiers on their flagship streaming services. MoffettNathanson estimates Netflix could generate $1.2 billion in U.S. advertising revenue by 2025, which is equal to just 4 percent of the company’s worldwide revenue last year; Disney+ could make $1.8 billion that year.

Despite the subscriber slide, Netflix remains the most popular streaming service with 221.64 million subscribers worldwide. Disney+ has 137.7 million.

SOURCE : IndieWire

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