Netflix has cut off over 150 workers in the US after suffering significant subscriber loss. The largest streaming platform made the announcement on Tuesday following reports of revenue loss.
Netflix intends to cut costs by removing some of its staff. The company’s decision will affect the office in California, which currently employs around 2% of Netflix’s total North American workforce. The company said that the loss of earnings prompted them to make the cut.
The company said that the removal is not based on individual performance but rather the revenue drop in recent months. According to the management, the announcement is especially tough for those who have enjoyed working alongside ‘such great colleagues.’
As of late, Netflix has not made an announcement yet on what part of the company or what department will lose its workers.
It is no secret that the media giant has seen a significant decline in subscribers. Last month, they announced another 200,000 had quit, and analysts predict two more million will be gone in the next quarters. The news sent stocks diving 35% within one day, with investors fearing the trend would continue.
Netflix has been a significant player in the entertainment industry for years, with over 220 million subscribers globally, but it’s facing some challenges from other streaming platforms. With more companies entering the space and offering good content at reasonable prices, Netflix needs to up its game. On-the-rise streaming platforms include HBO, Amazon’s Prime Video, and Disney Plus, among others.
Netflix’s decision to leave Russia cost the company 700,000 subscribers. The ongoing war between Ukraine and Russia also had an effect on Netflix’s losses in late 2021 and early 2022.
The company has been canceling shows to cut costs. The streaming giant announced that they would be stopping their animated series “Pearl,” created by Meghan Markle, in an effort to sustain their finances.
According to analysts, while the subscribers of Netflix increased during the pandemic, it ran out of ways to ‘grow’ its business.
Netflix says it will find ways to generate revenue.
To investigate password sharing cases
Netflix has released a statement to the media, warning that they may be looking into cases of password sharing among households.
The company explained, “Our relatively high household penetration – when including the number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
Over 100 million households benefit from password sharing, says company management. The households can access paid content for free.
Boss Reed Hastings told investors that they are now “working super hard” to counter the effects of account sharing among US households. He said this had been a major problem for them and their customers in other countries, but it will be solved soon.
Payment plans have already been put to play to solve password sharing in many parts of Latin America. However, Netflix would like to clarify that its crackdown on the problem is not aggressive. Instead, they would present customer-centric solutions.
“If the schemes to counter password sharing move too fast and too aggressively, it also risks alienating a potential future audience – many who password-share beyond the household are not actually aware they’re breaking the terms of their subscription,” said Dominic Sunnebo, an analyst at Kantar.
Opinions expressed by US Insider contributors are their own.
