The streaming giant lost 200,000 global paid subscribers in the first quarter of 2022 and predicts a loss of 2 million more users before June. The new layoffs affect largely U.S.-based employees, with a number of them in the executive ranks including original content. Netflix has 11,000 employees total and recently also laid off staff in its editorial division on April 28 with at least 10 full-time staffers getting the boot. “As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” a Netflix spokesperson told IndieWire. “So sadly, we are letting around 150 employees go today, mostly U.S.-based. 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. We’re working hard to support them through this very difficult transition.”
The company is closely watching its cost growth, but a Netflix source tells IndieWire the company still plans to spend $17 billion in content overall in 2022. The previous quarterly report stated that Netflix’s revenue growth has “slowed considerably” at the start of 2022. Netflix is currently in the middle of an ongoing shareholder lawsuit with claims that the streamer misled investors about subscriber loss, resulting in Netflix stock (NFLX) sinking by roughly 25 percent — or down about $85 — per share following the Q1 announcement last month. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds,” Netflix previously said in its quarterly letter to shareholders. The investors earnings call also confirmed that for the next two years, the streamer will be “pulling back on some of our spend growth across both content and non-content spend,” according to Netflix CFO Spence Neumann. “We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business.” A leaked notice to employees cited that Netflix may be introducing its lower-priced ad tier by Q4 of this year. The internal memo also cited an accelerated plan to limit password-sharing among subscribers. “Yes, it’s fast and ambitious and it will require some trade-offs,” the Netflix memo read, as reported by the Times. “Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.”
Ryan Lattanzio contributed reporting. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.
