Netflix has laid off about 150 staff, just a month after the entertainment giant disclosed that it was losing subscribers for the first time in a decade.
The lay-off, announced by the streaming service will mainly affect the company’s United States (US) office in California. The report indicated that the California office accounted for about 2% of its North American workforce.
In justifying the reason behind the job losses, Netflix said the decision is a result of the slump in the company’s revenue. The streaming service is battling an exodus of viewers this year.
In a statement released by the firm, it noted that “These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us wants to say goodbye to such great colleagues”.
Which Departments Have Experienced Job Losses?
Netflix has, however, not disclosed which parts of the business would see job losses, but a US-based newspaper agency reported that recruiting, communications, as well as the content department, are also affected. Some people who were formally employees of the firm also disclosed their job loss online.
In April 2022, the streaming giant revealed that it lost about 200,000 subscribers in the first three months of the year, and warned that another two million were expected to quit in the coming quarter.
After the announcement of the decline in subscribers, it sparked an investor sell-off, with the firm’s stock plunging 35% in a day, hence, it is now trading at $190 (£152), which is a 46% drop from its previous premium. While Netflix has about 220 million subscribers globally and remains the clear market leader, it has faced fierce competition in recent years with the arrival of competitor platforms such as Disney Plus, HBO, and Amazon’s Prime Video.
The Netflix Earning Report
In Netflix’s earnings report last month (April 2022), the company also said the war in Ukraine and the decision to raise its prices in the US placed a cost on its subscribers.
According to Netflix, pulling out of the Russian market alone cost the service about 700,000 members. Along with the job losses, the company is also cutting content and pulling back on its own creations. Earlier in May 2022, it cancelled the development of Pearl, an animated series created by Meghan Markle, aimed at cutting costs.
Some analysts intimated that after a surge in sign-ups during the pandemic, Netflix has run out of easy ways to grow the business. The company said it’s looking at a cheaper, ad-based model and also planning on cracking down on password sharing which cost the firm over 100 million households.