Netflix lays off 'around 150 employees' across divisions amid slowing growth and subscriber losses
Netflixis laying off "around 150" people, mostly in the United States, the company said on Tuesday.
- The reason for the
layoffs, Netflix said, is "slowing revenue growth."
On the heels of an unusually rough quarter and a forecasted decline of 2 million subscribers, Netflix laid off approximately 150 people on Tuesday.
The layoffs, which impact "mostly US-based" staff, are due to "slowing revenue growth," according to a statement from a Netflix spokesperson. "These changes are primarily driven by business needs rather than individual performance," the statement said," which makes them especially tough."
The personnel cuts hit divisions across the company and are not concentrated in any particular department. As Deadline first reported, the layoffs impacted at least some employees in "executive ranks, including in original content." The company has about 11,000 employees in total.
This is not the first round of layoffs to hit the streaming incumbent this year. After assertively recruiting high-profile writers and editors for its new fan site Tudum last year, Netflix laid off nearly a dozen contracted staffers from the editorial project in late April, in addition to about 25 employees in its marketing department.
Also in April, Netflix revealed that it had lost around 200,000 subscribers to its video streaming service in Q1, its first subscriber loss in over a decade.
Moreover, company leadership warned at the time of further subscriber losses in the months to come. Executives blamed "revenue growth headwinds" in a report to shareholders and said that heavy Netflix use during the height of the COVID-19 pandemic had "obscured the picture until recently."
Netflix aims to crack down on password sharing as part of its effort to combat slowing growth. In addition to its 220 million global subscribers, Netflix says another 100 million people use the service through a shared password. The company started testing a new feature in Latin America in which subscribers would be able to add up to two "extra member" accounts for a small additional fee.
Netflix was an early success story during the first months of the pandemic, as millions of people stuck indoors marathoned Netflix shows like "Tiger King."
"COVID clouded the picture by significantly increasing our growth in 2020," the company's Q1 shareholder letter said, "leading us to believe that most of our slowing growth in 2021 was due to the COVID pull forward."
In the two years since, new competition from the likes of Disney+ and HBO Max has increasingly drawn viewers in a streaming market once dominated by Netflix.
Demand for Netflix's originals has plateaued over the last year compared to streaming rivals, according to data released Tuesday by Parrot Analytics, a company that measures audience demand, which reflects the engagement with and interest in content.
Netflix's 2022 content budget of around $17 billion to $18 billion is unaffected. As Netflix CFO Spencer Neumann said on the Q1 2022 call in April, the company will be "pulling back on some of our spend growth across both content and noncontent spend, but still growing our spend and still investing aggressively," adding, "we're trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business."
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