Netflix has laid off 300 additional employees — about 3 percent of its workforce — marking the latest round of major layoffs at the embattled streaming giant.
“Ted and I regret that we did not see a slowdown in our revenue growth earlier, so we could have ensured a more gradual readjustment of the business,” read a memo sent to employees Thursday from Netflix co-chairs Reed Hastings and Ted Sarandos.
About 216 of the affected employees were in the United States; 30 employees were laid off in Asia Pacific countries; 53 in Europe, Middle East and Africa; and 17 in Latin America, as stated in the note.
“We know that these two rounds of layoffs have been very difficult for everyone – causing a lot of anxiety and uncertainty. We plan to return to our usual course of business more in the future. Given that we are cut in some areas, we are also continuing to invest,” Hastings and Sarandos wrote. Significant amounts of our content and people: Over the next 18 months, our employee base is planned to grow by about 1.5 thousand to reach 11.5 thousand.
A Netflix spokesperson said in a statement that the cuts were made so that “streaming costs are increasing in line with our slower revenue growth.”
In May, Netflix laid off about 150 employees due to “slow revenue growth,” rather than “individual performance,” a Netflix spokesperson said at the time. Of those employees affected last month, 106 were employees of Netflix’s Los Angeles office, according to a report sent to the California Department of Employment Development. In addition to full-time employees, many of whom are in the animation division, Netflix has also cut dozens of contractors who work across the company’s social media and publishing channels, including those dedicated to underrepresented identities such as Strong Black Lead, Con Todo, Most and Netflix Golden.
The employee cuts came shortly after another round of layoffs that saw the loss of several contractors and full-time employees who work at Tudum, a Netflix fan site run by the company’s marketing department. The company launched Tudum last December to produce consumer-oriented digital content around its own titles such as Bridgeton, Stranger ThingsAnd the love is blind And the sunset sale.
The move comes as Netflix continues to grapple with and respond to an increasingly challenging streaming environment, as it competes with tech giants like Amazon Prime Video and Apple TV+ as well as giant studio platforms like Disney+, Hulu, Paramount+, HBO Max and Discovery. + . (In Nielsen’s April State of Play survey, about 46 percent of respondents answered that “it’s hard to find streaming video content that they want to watch because there are so many streaming services available.”)
On April 19, Netflix revealed that it lost 200,000 subscribers in the first quarter of the year, well below its own subscriber addition expectations. The last time Netflix revealed a subscriber loss was in late 2011, and for much of the past decade, the company has been seen as a growth story that has led the industry toward a streaming-focused present. The streaming device, which has about 222 million subscribers globally, gave lower expectations for the next quarter, saying it was preparing to lose another 2 million subscribers.
It has responded by looking at ways to control costs and revive subscriber growth.
When asked on an earnings call about spending nearly $18 billion on content for this year, Sarandos said, “We will continue to increase content spending compared to previous years.” CFO Spencer Newman added that Netflix is ”backtracking” on “content and non-content spending growth” while “we continue to increase our spending and continue to invest aggressively.”
The company also said it was working on ways to eliminate password sharing, noting that 100 million households share the service. It has signaled a strong expansion outside its core subscription business model by offering mobile games – including adaptations from its own series such as Queen’s gambit And the Stealing money – Plus plans for a cheaper ad-supported tier. (Netflix’s “Basic” subscription plan is currently $9.99 while its “Standard” plan is $15.49.)
“We’ve left a huge cross-section of customers off the table, the people who are saying, ‘Hey, Netflix is too expensive for me and I don’t mind advertising,'” Sarandos said at the June 23 session at the Cannes Lions. With Kara Swichers, we’re adding an ad category; We don’t add ads to Netflix as you know it today. We’re adding an ad layer for people who say, “Hey, I want a lower price, and I’ll see ads.”
Since January. On the third trading day in 2022, stock in the streaming giant is down about $70, from $597.37 a share to $177.39 a share as of June 23.
On June 14, the service received a stock downgrade from Benchmark analyst Matthew Harrigan, dropping the company from “hold” to “sell” with a target price of $157. Days ago, Goldman Sachs analyst Eric Sheridan downgraded the company from “neutral” to “sell” and lowered the company’s target price from $265 to $186, saying, “We have concerns about the impact of the consumer recession as well as high levels of competition” from influx of competitors.
Alex Webrin contributed to this report.