Netflix lays off 150 employees and cuts contractor roles in social media and publishing
Netflix is laying off around 150 employees across the board. His spokesperson confirmed the move to INTERACTIVE-MARKETING, adding that most employees are based in the United States. “As we explained on earnings, the slowing of our revenue growth means that we also need to slow the growth of our costs as a business,” the spokesperson said, adding that these changes are primarily driven by business needs rather than individual performance.
“It makes [the changes] all the more difficult since none of us want to say goodbye to such wonderful colleagues. We are working hard to support them through this very difficult transition,” the spokesperson added. The job cuts come less than a month after Netflix reportedly cut staff from its internal editorial content arm, Tudum.
According to several media, including The Hollywood Reporter (THR), the recent layoffs represent approximately 2% of its total workforce. At the same time, Netflix also reportedly laid off 70 roles from its animation division and reduced contractor roles in its social media and publishing channels, THR said.
In April, Bloomberg reported that the layoffs at Tudum were part of a broader restructuring of Netflix’s marketing department. Launched last December, Tudum had only been around for about five months. Meanwhile, TechCrunch reported that Netflix would not shut down Tudum and quoted a spokesperson as saying the website remains “an important priority for the company.” Several Tudum staffers took to Twitter last month to announce that they had been fired. At least four writers tweeted that they had been fired, including an editorial director.
In April, Netflix reported a loss of about 200,000 subscribers, making it its first drop in paid subscribers in more than 10 years, CNBC said. The streaming giant also expects to lose two million paid subscribers worldwide in the second quarter of this year. This prompted the company to consider ad-supported plans after years of pushing advertising back. Co-CEO Reed Hastings said on the earnings call that providing a cheaper option to consumers “would make a lot of sense”.
Hastings explained that he was against “advertising complexity and a big fan of subscription simplicity”. Nonetheless, he’s still a fan of consumer choice and “allowing consumers who want a lower price and are tolerant of ads to get what they want makes a lot of sense.” Netflix expects ad-supported plans to roll out in a year or two.
CFO Spencer Neumann also said on the call that Netflix is ”retiring some of [its] expense growth in both content and non-content spend.” “We’re trying to be smart and careful in terms of reducing some of that expense growth to reflect the realities of the revenue growth of the business.” Netflix reported first-quarter revenue of $7.87 billion, below the expected $47.93 billion.
In addition to recent layoffs, Variety reported that Netflix also canceled several anime projects, including wings of fire, anti-racist babyand Kind regards from Kindergarten. However, citing his sources, Variety said the cuts were not cost-related but rather creative. That meant the projects would still have moved forward despite Netflix’s slowing revenue growth.
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