By Alice Seeley
Nearly one month after Netflix reported its first major subscriber loss in more than a decade, the streaming platform announced it had laid off 150 employees on May 17.
As of December 2021, Netflix had around 11,300 full-time employees, meaning this layoff represents 1.3% of the company’s workforce. In April, Netflix also laid off 25 employees in marketing-related jobs, including contractors who had been there less than a year. In addition, Netflix eliminated 70 roles in its animation department and reduced contractor roles in its social media and publishing channels. Impacted employees will receive severance packages lasting at least four months. However, that time period could increase depending on the staffer’s position and how long they have been with the company.
A spokesperson for the company stated, “as we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly US-based.” The spokesperson clarified that the layoff was “primarily driven by business needs rather than individual performance.” The layoff also impacted several agency contractors.
The layoffs came after Netflix’s stock decreased dramatically since it announced it had lost 200,000 subscribers since December 2021. As a result of this loss, the company’s revenue did not meet expectations. Netflix’s quarterly letter to shareholders stated, “our revenue growth has slowed considerably as our results and forecast below show. 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 CFO, Spencer Neumann, said the company would reduce costs in the upcoming months.
“For the next 18, 24 months, call it the next two years, we’re kind of operating to roughly that operating margin, which does mean that we’re pulling back on some of our spend growth across both content and noncontent spend, but still growing our spend and still investing aggressively into that long-term opportunity,” Neumann said. “We’re trying to be smart about it and prudent in terms of pulling back on some of that spending growth to reflect the realities of the revenue growth of the business.”