Following the streaming giant’s first subscriber loss in more than a decade, Netflix Inc. announced it has fired 300 workers, or approximately 4% of its workforce, as part of a second wave of cost-cutting measures.
The decision, which came after the corporation lost 150 employees last month, largely affected its American workers.
While we continue to make sizable investments in the company, we made these changes to ensure that our costs are rising in step with our slower revenue growth, according to a statement released by Netflix on Thursday.
The world’s most popular streaming service has been under pressure recently as tough competition, inflation, and the conflict in Ukraine impact on user growth. Netflix has projected even greater losses for the upcoming quarter in response to the first quarter’s decline in subscribers.
The company intends to launch a less expensive, ad-supported membership tier for which it is in talks with a number of businesses in order to reverse that downward trend.
In an email, a Netflix representative stated, “While we continue to invest heavily in the business, we made these modifications so that our costs are growing in line with our slower revenue growth.” We really appreciate everything they have done for Netflix and are making every effort to help them get through this challenging transition.
Following the disruption of its subscription-based business model caused by the cancellation of 200,000 customers in the first quarter of 2022, Netflix is restructuring its operations. The issues have depressed employee morale and battered the stock price of the corporation.
Along with the May layoffs, Netflix also terminated some contract employees and editorial personnel from its Tudum website in April as part of a reduction in its marketing expenditures.
A price increase in January contributed to Netflix’s subscriber problems. Additionally, it is up against more competition from streaming services like Amazon.com Inc., Walt Disney Co., and Hulu, all of which have lately reported subscription growth.
According to co-CEO Ted Sarandos, Netflix Inc. is in discussions with a number of businesses about advertising partnerships as the streaming juggernaut tries to halt a decline in subscriber growth by introducing a less expensive plan with adverts.
According to media reports from earlier this week, it was in talks for potential marketing alliances with NBCUniversal and Google, both of which are owned by Comcast Corp.
When asked which company Netflix was hoping to work with, Sarandos responded at the Cannes Lions conference, “We’re talking to all of them right now.”