By Nathalie Voit
Netflix implemented its second round of staff cuts on June 23, just one month after the company let go of 150 employees in the wake of a disappointing first-quarter earnings report.
In a statement verified by CNBC, the streaming giant said it had laid off about 300 employees on Thursday, or about 3% 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. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition,” Netflix said in the statement.
According to a transcript of Netflix’s Q1 earnings call in April, Chief Financial Officer of Netflix Spencer Adam Neumann warned that the streaming company would be dealing with narrower operating margins for the next two years. As a result, Neumann said Netflix would be “pulling back” on some of its spending growth.
President and Co-CEO of Netflix Wilmot Reed Hastings also said during the call that Netflix is looking at offering lower-priced, ad-supported plans.
“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription. But as much I’m a fan of that, I’m a bigger fan of consumer choice,” Hastings said. “Think of us as quite open to offering even lower prices with advertising as a consumer choice.”
In addition to exploring more subscription tiers across a range of price points, the executive officers said the company is working on how to monetize account sharing. According to Hastings, over 100 million households currently use the service without paying.
Coupled with greater competition within the streaming industry, Netflix blamed these factors for their lower acquisition and growth in the first quarter.
As of June 24, around noon, Netflix shares are selling at $187.86 a share, down about 70% since the start of the year.
