Netflix lays off employees after losing subscribers for the first time in a decade
The streaming platform has laid off 150 employees, a few weeks after layoffs at its companion site Tudum.
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Netflix has laid off 150 employees across the company, most of whom were U.S.-based. These layoffs account for less than 2% of the company’s 11,000-plus employees and come almost a month after Netflix first reported they’d lost 200,000 subscribers in the first quarter. The company’s shares have also been down almost 70% since January because of this report.
A company representative for Netflix told CNBC, “As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company.”
They added, “So sadly, we are letting around 150 employees go today, mostly US-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.”
In addition to these layoffs, Netflix also laid off a team of writers and editors from its companion site, Tudum. These layoffs came days after the initial report of subscriber loss and only a few months after many of those laid off had been hired.
When asked about the layoffs at Tudum, a company representative told NPR, “Our fan website Tudum is an important priority for the company."
Those employees were given no notice about their firing and only two weeks of severance pay.
Reasons that Netflix has given for subscriber loss are increasing competition, inflation, easing pandemic restrictions, and suspending service in Russia. The company also lost 700,000 subscribers in March after suspending service in Russia after its invasion of Ukraine.
To reduce further subscriber loss, Netflix is planning to crack down on password sharing and potentially offer a lower-priced service that is supported by ads.
The company estimates that over 100 million households are watching through password sharing, in addition to the 222 million households that are paying.
Netflix remains the predominant streaming subscription service, however has seen increased competition in recent years with the emergence of alternative options, such as Disney+ and HBO Max, among others.