Netflix cuts jobs after fall in subscriber numbers

About 150 employees have been laid off in the United States

Netflix has reported that has it lost subscribers for the first time in more than a decade.  Reuters
Beta V.1.0 - Powered by automated translation

Netflix said it laid off about 2 per cent of its staff in a belt-tightening move after growth slowed at the once-booming television streaming 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 Netflix representative told AFP.

About 150 employees have been laid off, most of them in the United States, the representative said. They said Netflix also cut spending on contractors.

The moves came just weeks after Netflix reported that it lost subscribers for the first time in more than a decade.

"Our slowing revenue growth means we are also having to slow our cost growth as a company," the representative said.

Netflix ended the first quarter of this year with 221.6 million subscribers, slightly fewer than the final quarter of last year.

The company blamed the quarter-over-quarter erosion to suspension of its service in Russia following Moscow's invasion of Ukraine.

____________________________

Netflix announces new titles for May

____________________________

A drop of 200,000 users — less than 0.1 per cent of its total customer base — was enough to send Wall Street panicking when Netflix reported quarterly earnings in April.

Chief financial officer Spence Neumann said on an earnings call that Netflix would be "pulling back" on spending for the next two years, while continuing to invest billions of dollars in the platform.

The Silicon Valley tech firm reported a net income of $1.6 billion in the recently ended quarter, compared to $1.7bn in the same period a year earlier.

Netflix believes that factors impeding its growth include subscribers sharing accounts with people not living in their homes.

The company estimated that while it has nearly 222 million households paying for its service, accounts are shared with more than 100 million other households not paying subscription fees.

Netflix is testing ways to make money from people sharing accounts, such as by introducing a feature that lets subscribers pay slightly more to add other households.

"When we were growing fast, it wasn't a high priority and now we're working super hard on it," chief executive Reed Hastings said of account-sharing during an earnings call.

"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 factor stifling Netflix growth is intense competition from rivals such as Apple and Disney.

Netflix is looking at adding a lower-priced subscription tier subsidised by advertising, a model that Mr Hastings had long snubbed.

Updated: May 18, 2022, 8:19 AM
EDITOR'S PICKS
NEWSLETTERS
MORE FROM THE NATIONAL