Netflix has cut an additional 300 employees, about 3 percent of its workforce, marking the last round of major layoffs to the besieged playback giant.
“Ted and I are sorry we haven’t seen our slowdown in revenue growth before, so we could have ensured a more gradual readjustment of the business,” read a note sent Thursday to Netflix co-heads staff Reed Hastings and Ted Sarandos.
About 216 affected employees were in the United States; 30 employees were cut in Asia-Pacific countries; 53 in Europe, the Middle East and Africa; and 17 in Latin America, is indicated in the note.
“We know that these two rounds of layoffs have been very difficult for everyone, creating a lot of anxiety and uncertainty. We intend to return to a more normal course of business in the future. And as we shrink in some areas, we also continue. investing significant amounts in our content and people: over the next 18 months, our employee base is expected to grow between ~ 1.5K and ~ 11.5K, ”Hastings and Sarandos wrote.
A Netflix spokesman said in a statement that the cuts were made because “the streamer’s costs are growing in line with our slower revenue growth.”
In May, Netflix laid off about 150 employees due to “slower revenue growth,” rather than “individual performance,” a Netflix spokesman said at the time. Of those employees affected last month, 106 were based at Netflix’s Los Angeles office, according to a document in the California Department of Employment Development. In addition to full-time employees, many of whom were in the animation department, Netflix also cut dozens of contractors working on the company’s social media and publishing channels, including those dedicated to underrepresented identities like Strong Black Lead, Con Todo, Most and Netflix Golden.
Staff cuts came shortly after another round of layoffs that resulted in the loss of several contractors and full-time employees working at Tudum, a Netflix fan site run by the marketing division of the company. The company had released Tudum last December to produce consumer-oriented digital content about its own titles such as Bridgerton, Stranger Things, Love Is Blind and Selling Sunset.
The move comes as Netflix continues to struggle and respond to an increasingly difficult streaming environment, where it is competing with tech giants like Amazon Prime Video and Apple TV +, as well as studio cluster platforms like Disney +, Hulu, Paramount +, HBO Max and Discovery +. . (In the April Nielsen real-time playback survey, about 46 percent of respondents responded that “it’s harder to find the video playback content they want to watch because there are too many streaming services available) .
On April 19, Netflix revealed that it had lost 200,000 subscribers in the first quarter of the year, well below its own subscriber addition expectations. The last time Netflix revealed a loss of subscribers was in late 2011, and for much of the last decade, the company has been seen as a growth story that brought the industry into a present focused on the transmission. The streamer, which has about 222 million subscribers worldwide, also gave a lower forecast for the next quarter, saying it is preparing to lose 2 million more subscribers.
And it has responded by looking for ways to control costs and reactivate subscriber growth.
When asked in a earnings call about a spending on content of approximately $ 18 billion for this year, Sarandos said, “We will continue to increase spending on content relative to previous years.” Chief Financial Officer Spencer Neumann added that Netflix is ”retracting” its “growth in spending on both content and non-content spending,” while “still increasing our spending and still investing aggressively.”
The company also said it is working on ways to crack down on password sharing, noting that 100 million households share the service. And it has signaled an aggressive expansion outside of its core subscription business model by introducing mobile games, including adaptations of its own series like The Queen’s Gambit and Money Heist, as well as plans for a cheaper and more compatible level. with advertising. (Netflix’s “basic” subscription plan is currently $ 9.99, while its “standard” level is $ 15.49.)
“We’ve left a large segment of customers off the table, which is the people who say,‘ Hey, Netflix is too expensive for me and I don’t care about advertising, ”Sarandos said in a June 23 panel on Cannes Lions with Kara Swisher. “We’re adding an ad level; we’re not adding ads to Netflix as you know it today. We’re adding an ad level for people who say, ‘Hey, I want a lower price and I’ll look at ads “.
Since Jan. 3, the first trading day of 2022, the shares of the streaming giant have fallen about $ 70, from $ 597.37 per share to $ 177.39 per share on June 23.
On June 14, the service received a downgrade from Benchmark analyst Matthew Harrigan, leaving the company to “hold back” to “sell” with a target price of $ 157. Days earlier, Goldman Sachs analyst Eric Sheridan downgraded the company from “neutral” to “sell-off” and lowered its target price for the company from $ 265 to $ 186, saying, “We have concerns about the impact of a recession on consumers and higher levels of competition ”from streaming rivals.
Alex Weprin contributed to this report.