Netflix is losing paid subscribers rapidly and that is one of the primary reasons why the company’s revenue growth has slowed down over the years.
The streaming giant confirmed that it has conducted the second round of layoffs and has let go of close to 300 employees. Netflix had previously laid off close to 150 employees due to poor earnings and slow revenue growth. A drop in its stock price is also one of the reasons behind the company’s downfall.
As per The Variety, Netflix had previously acknowledged plans to trim expenses due to slowing growth. The company confirmed that it has “sadly let go of 300 employees”.The report reveals that most job losses have taken place in the US and have happened across multiple business divisions. Variety reports that Netflix has a total of 11,000 employees. So the latest round of layoffs has affected approximately 2 percent of its workforce.
“While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth,” the Netflix spokesperson said in a statement on Thursday. “We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”
In the first round of layoffs, Netflix fired 150 employees. The company stated that the decision to remove people was more business driven rather than individual performance. Netflix reported $7.87 billion in Q1, which was short of Wall Street’s estimates of $7.93 billion.
Netflix had announced during one of the earnings calls it lost over 2 lakh subscribers, which had never happened with the company before.The company had also envisaged losing an additional 2 million in the next quarter due to the ongoing war between Russia and Ukraine. Netflix has shut shop in Russia following the country’s invasion of Ukraine.
However, the company is trying to come to grips with its loss. Netflix is now working on a cheaper ad-based subscription plan that is likely to attract a lot of users. Another major issue that Netflix faces is password-sharing. So the company is also working on cracking down on password sharing to boost subscriber growth.
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