Netflix has confirmed that it has laid off about 150 mostly U.S. employees as it works to curb costs as growth in its top line has slowed.
A Netflix spokesman wrote in an email: “As we explained regarding revenue, our slowdown in revenue growth means we also need to slow down cost growth as a company. Unfortunately, today we are releasing about 150 employees, mostly from the US. These changes are primarily driven by business needs rather than individual indicators, which makes them particularly difficult as none of us want to say goodbye to such wonderful colleagues. We are making every effort to support them in this very difficult transition. “
Deadline reported that a significant number of those released were in creative, including in original content. It is reported that among those who were released were directors from the original series, such as Sebastian Gibbs, Brooke Kessler and Negin Salmassi. Some exclusive roles were also touched upon, the report said.
The staff cuts were expected, the company said in its quarterly announcement letter to shareholders, “Our revenue growth has slowed significantly, as our results and forecast below show.” Netflix reported $ 7.87 billion in revenue for the first quarter of 2022 and significant loss 200,000 subscribers. Analysts forecast $ 7.93 billion and 2.7 million subscribers. Belt tightening was on the horizon as soon as these quarterly figures hit.
Netflix has also recently cut back a smaller group of 25 people with Tudum’s newly launched content marketing operation – a clear place to start, given that it’s not critical to Netflix’s core business. But these further layoffs suggest that the streamer is making more strategic cuts in its operations as it seeks to better manage its costs in an increasingly competitive streaming medium.
Cost-cutting measures were also discussed by Netflix CFO Spencer Neumann during a recent earnings call. He said: “… probably in the next 18, 24 months, call it the next two years, we’re working around this operating margin, which means we’re stopping the growth of our costs for both maintenance and content but still increase our costs and continue to invest aggressively in these long-term opportunities. Neumann added: “We try to be smart and prudent in diverting part of this cost growth to reflect the realities of business revenue growth.”
Recently, Netflix has been straining, stopping the exchange of passwords and announcing a cheaper level with advertising support in the hope of gaining new subscribers and stimulating further growth.
Additional report: Sarah Perez