Netflix fired 150 employees after reporting an unprecedented drop in the number of subscribers

Netflix shares plummet more than 35% after reporting a drop in users and revenue (REUTERS / Given Ruvic)
Netflix shares plummet more than 35% after reporting a drop in users and revenue (REUTERS / Given Ruvic)

Netflix said on Tuesday it had laid off about 150 people.mostly in the United States, as the streaming service company faces a growth slowdown.

The layoffs represent approximately two% of the company’s workforce in the United States and Canada.

“These changes are primarily driven by business needs rather than individual performance, which makes them especially difficult as none of us want to say goodbye to such great colleagues,” the company said in a statement. “We are working hard to support them during this very difficult transition.”

Job cuts occur when Netflix reported its first loss of subscribers in more than a decade and forecast deeper losses in the coming quarter. He said that the war in Ukraine and fierce competition contributed to the loss of customers.

As a result of its declining growth, Netflix said it would introduce a cheaper level with advertising and that you would take a closer look at your spending.

We’re trying to be smart about it and prudent in terms of curtailing some of that expense growth to reflect the realities of business revenue growth.Netflix CFO Spencer Neumann told investors during the company’s most recent earnings call. call.

In April, the company said that lost 200,000 subscribers in its first quarterwell below his forecast of add 2.5 million subscribers. The suspension of service in Russia after the invasion of Ukraine took its toll, which it resulted in the loss of 700,000 members.

The job cuts come as Netflix reported its first loss of subscribers in more than a decade (REUTERS/Mike Blake)
The job cuts come as Netflix reported its first loss of subscribers in more than a decade (REUTERS/Mike Blake)

Since warning in January of weak subscriber growth, the company has lost nearly half its value.

Lagging subscriber growth is prompting Netflix to consider offering a cheaper version of the ad-supported service, citing the success of similar offerings from rivals HBO Max and Disney+.

“Those who have followed Netflix know that I have been against the complexity of advertising and I’m a big fan of the simplicity of subscription.” said Netflix CEO Reed Hastings. “But as much of a fan of that as I am, I’m a bigger fan of consumer choice.”

Netflix offered a gloomy prediction for the spring quarter, forecasting that would lose 2 million subscribersdespite the return of long-awaited series such as stranger things Y Ozarks and the movie debut The Gray Manstarring Chris Evans and Ryan Gosling.

Hastings told investors the pandemic had “created a lot of noise,” making it difficult for the company to interpret the rise and fall of its subscription business over the past two years. Nowit seems that the culprit is a combination of competition and the number of accounts sharing passwords, which hinders growth.

“When we were growing rapidly, working on that wasn’t a high priority,” Hastings said of the account swap in comments during Netflix’s investor video. “And now we are working very hard on it.”

(With information from Reuters)

Keep reading:

Netflix already has a plan in the face of the loss of 200,000 users
Netflix shares plunge more than 35 percent after reporting a drop in users and revenue

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