Netflix Fires 300 More Workers Citing Slower Revenue Growth After Drop In Paid Subscribers

Highlights:

  • There has been a second round of layoffs at Netflix.
  • Nearly 300 staff at Netflix have been asked to quit.
  • People are let go by Netflix more for business reasons than for their individual performance.

One of the main reasons for Netflix’s revenue growth slowing down over the years is the company’s rapid loss of paid subscribers. The world’s largest streaming platform said that it had carried out the second round of layoffs and fired close to 300 employees. Due to low profitability and weak revenue growth, Netflix previously let go of close to 150 people. One of the factors contributing to the company’s downfall was a decline in its stock price.

Variety reports that Netflix previously disclosed plans to reduce expenditure because of sluggish growth. The company said that it “sadly let go of 300 employees.”  According to the report, job losses have primarily occurred in the US and have affected a variety of business divisions. According to Variety, Netflix employs 11,000 people in total. Therefore, the most recent round of layoffs affected 2% of its staff.

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The Netflix spokesperson said in a statement on Thursday that “while we continue to significantly invest in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”

150 staff were let go by Netflix in the first round of layoffs. The business claimed that business interests overrode individual performance in making the decision to fire workers. Netflix’s Q1 revenue of $7.87 billion fell short of Wall Street’s estimate of $7.93 billion.

During one of the earnings calls, Netflix reported losing over 2 lakh subscribers, something that had never happened to the company before.

Due to the ongoing conflict between Russia and Ukraine, the corporation had also budgeted an extra 2 million in losses for the next quarter. Following Russia’s invasion of Ukraine, Netflix has closed its Russian operations.

However, the company is attempting to accept its loss. Currently, Netflix is developing a less expensive, ad-based subscription plan that will most certainly draw a sizable user base. Password sharing is a significant problem for Netflix. In order to increase membership growth, the company is also attempting to tighten down on password sharing.