Netflix Says It Laid Off 2 Percent Staff Due to Slowing Revenue Growth

Netflix on Tuesday stated it laid off about two p.c of its employees in a belt-tightening transfer after development slowed on the once-booming streaming tv service.

“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,” a spokesperson advised AFP.

About 150 workers have been laid off, most of them within the United States, the spokesperson stated, including that Netflix additionally lower spending on contractors.

The strikes got here simply weeks after Netflix reported that it misplaced subscribers for the primary time in additional than a decade.

“Our slowing revenue growth means we are also having to slow our cost growth as a company,” the spokesperson stated.

Netflix ended the primary quarter of this 12 months with 221.6 million subscribers, barely lower than the ultimate quarter of final 12 months.

The firm blamed the quarter-over-quarter erosion to suspension of its service in Russia resulting from Moscow’s invasion of Ukraine.

A drop of simply 200,000 customers — lower than 0.1 p.c of its complete buyer base — was sufficient to ship Wall Street panicking when Netflix reported quarterly earnings in April.

Chief monetary officer Spence Neumann stated on an earnings name that Netflix can be “pulling back” on spending for the following two years, whereas persevering with to speculate billions of {dollars} within the platform.

The Silicon Valley tech agency reported a internet revenue of $1.6 billion (roughly Rs. 12,409 crore) within the lately ended quarter, in comparison with $1.7 billion (roughly Rs. 13,184 crore) in the identical interval a 12 months earlier.

Netflix believes that components hampering its development embrace subscribers sharing accounts with individuals not residing of their houses.

The streaming big estimated that whereas it has almost 222 million households paying for its service, accounts are shared with greater than 100 million different households not paying subscription charges.

Netflix is testing methods to earn money from individuals sharing accounts, similar to by introducing a characteristic that lets subscribers pay barely extra so as to add different households.

“When we were growing fast it wasn’t a high priority and now we’re working super hard on it,” chief government Reed Hastings stated of account sharing throughout an earnings name.

“These are over a hundred million households that already are choosing to view Netflix; they love the service, we’ve just got to get paid in some degree for them.”

Another issue crimping Netflix development is intense competitors from titans similar to Apple and Disney.

Netflix is including a lower-priced subscription tier subsidised by promoting, a mannequin that Hastings had lengthy snubbed.