Netflix says it’s cutting about 150 jobs after announcing that it’s lost 200,000 subscribers since the end of last year.
Most of the employees being laid off are based in the US and work in creative positions across film and TV.
The California-based streaming service is even eliminating some executive positions in its original content departments, sources told Deadline. A few director-level executives may also be on their way out.
The news comes a month after the company reported that its global subscriber base declined in the first quarter of 2022. It expects to lose another two million subscribers by next quarter, Fortune reports.
On top of that, the streamer failed to meet revenue expectations by $62 million. Share prices are down 43.6 percent from last month.
Last month, the company identified four key issues that were costing it subscribers: increasing competition, slowing smart TV adoption, password sharing, and ‘macroeconomic developments,’ such as the ongoing COVID-19 pandemic, inflation and Russia’s invasion of Ukraine.
Netflix is cutting 150 of its 11,000 jobs on Tuesday. Above, the company’s headquarters on Sunset Boulevard in Hollywood
Share prices are down by 43.6 percent from last month after the company announced it lost subscribers and failed to meet revenue expectations
The 150 layoffs have been expected as Netflix struggles to attract new subscribers.
‘As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly US-based,’ a Netflix spokesperson told Deadline.
‘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.’
In its quarterly letter to shareholders, the company said: ‘Our revenue growth has slowed considerably as our results and forecast below show.
‘Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.’
In an earnings call, CFO Spencer Neumann said the company plans to pull back some of its planned spending for the ‘next two years.’
‘We’re kind of operating to roughly that operating margin, which does mean that we’re pulling back on some of our spend growth across both content and noncontent spend, but still growing our spend and still investing aggressively into that long-term opportunity,’ he said, according to Deadline.
In an earnings call, CFO Spencer Neumann said the company plans to pull back some of its planned spending for the ‘next two years.
In a letter to shareholders dated April 19, the company admitted that there were four factors slowing it down.
One is ‘the uptake of connected TVs (since the majority of our viewing is on TVs), the adoption of on-demand entertainment, and data costs,’ which the company says it can’t control.
A second factor is password sharing. The company estimates that in addition to its 222 million paying households, another 100 million households are piggybacking for free.
Third, increasing competition from Youtube, Amazon, Hulu and other streamers is cutting into its market, though Netflix continues to dominate by a small margin.
Lastly, the company cited macroeconomic factors like ‘sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine and some continued disruption from COVID.’
The tech company says it lost 700,000 subscribers when it pulled out of Russia.
Last week, Netflix dished out a new ‘culture memo’ to staff telling them if they are offended by content the company is working on, they can leave.
The guidance came largely in response to workers saying they would part ways with the company if they continued to work with Dave Chappelle, whose recent specials for the streamer have caused backlash over jokes about transgender people.
Protests erupted outside Netflix last year as staff walked out at their campus in LA due to Chapelle’s comments on specials for the streamer
Netflix issued a guidance in response to workers saying they would part ways with the company if they continued to work with Dave Chappelle, whose recent specials for the streamer have caused backlash over jokes about transgender people
Last week, the LA-based streaming service dished out a new ‘culture memo’ to staff telling them if they are offended by content the company is working on, they can leave the firm. In response to a tweet noting the change, Musk tweeted, ‘Good move by @netflix’
The tweet is a stark about-face from an earlier online assertion in April by the Tesla CEO, where he slammed the streamer for pandering to progressive staffers while hemorrhaging subscribers
The new policy, titled ‘Artistic Expression,’ asserts that brass at the company will not ‘censor specific artists or voices’ even if employees consider the content ‘harmful.’
In response to a tweet noting the change, Tesla CEO Elon Musk tweeted, ‘Good move by @netflix.’
The tweet came as a stark about-face from an earlier online assertion in April, when the South African-born entrepreneur slammed the streamer for pandering to progressive staffers while hemorrhaging subscribers.
‘The woke mind virus is making Netflix unwatchable,’ the world’s richest man wrote at the time, responding to a tweet about the subscription service’s recent abysmal subscriber numbers.
Musk wrote in a follow-up tweet: ‘Can they please just make sci-fi/fantasy at least *mostly* about sci-fi/fantasy?’