Netflix axes another 300 staff
June 24, 2022
By Chris Forrester
Netflix is to downsize an extra 300 staff in the second round of cuts on top of the 150 announced in May as it continues to react to subscriber losses. Most of the positions are in the US, although Netflix stresses that it is still hiring for some jobs.
In a statement, Netflix said: “Today, we sadly let go of around 300 employees. 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.”
Commenting on the news, Francesca Gregory, Thematic Analyst at GlobalData, a data and analytics company, said: “Like many of its increasingly cash-strapped customers, Netflix is tightening its belt. In its latest earnings call, Netflix stoked investors’ concerns when it reported a loss of 200,000 subscribers at the start of 2022. Once a dominant force in the SVoD market, Netflix now appears to be in survival mode, working overtime to cut costs. The latest layoffs should come as no surprise to those that have tracked the company’s recent fall from grace. During the pandemic, Netflix’s popularity reached new heights, but the company now faces significantly reduced growth prospects. This is illustrated by its hiring trends, with active jobs decreasing by 61 per cent between December 2020 and June 2022, according to GlobalData figures. The latest layoffs are a reflection of increasingly strong headwinds in the streaming market, with huge content spends and the rising costs of living for viewers proving impossible to balance for streaming platforms.”
“Although the increasingly bleak macroeconomic outlook and rising competition make cutbacks more likely, the layoffs have sparked ESG concerns on social media. The latest layoffs come less than two months after editorial staff at Netflix-owned fan site, Tudum, were let go. The site covered issues around inclusion and representation. Following the cutbacks, former Tudum editor Evette Dione suggested that Netflix was laying off staff responsible for increasing diversity, equity, and inclusion Netflix has stated its commitment to promoting diversity and inclusion in its content and workforce, but this commitment has recently been questioned. Further backlash will undoubtedly add momentum to the company’s ongoing subscriber exodus,” concluded Gregory,
Meanwhile, Ted Sarandos, co-CEO at Netflix, told delegates at the Cannes Lions advertising summit that the company was in discussions with many potential advertisers and exploring adding an ad-based tier for subscribers faced with higher charges.
“We’re talking to all of them right now,” Sarandos said when asked which company Netflix was looking to partner with.
Netflix has some 220 million subscribers worldwide but the market is expecting further losses in the overall subscriber count with projections that the current quarter could see losses of some 2 million. The company blamed the falls on a range of factors, including increased competition, the economy, the war in Ukraine, and the large number of people sharing their accounts with non-paying households.