Netflix FIRES another 300 workers despite streaming giant claiming it is ‘investing in the business’ as chaos continues after losing 70% of value and shedding 200,000 subscribers
- Netflix has laid off 300 staffers as the company continues to cut costs
- Streaming giant has lost 200,000 subscribers this year and expects to lose more
- The stock price has plummeted in recent months, exacerbated by the ailing state of the US economy
Netflix has cut another 300 staffers weeks after laying off over 150 employees as the streaming giant tried to grapple with a weakened stock price.
The firm employs 11,000 staffers globally, and the cuts were made across multiple areas of the company as executives try to cut costs wherever they can.
‘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,’ a Netflix spokesperson told Variety.
Netflix announced it had lost 200,000 subscribers at the end of Q1, shrinking the value of the company nearly 70%. It also announced it expects to lose another 2 million subscribers by the end of Q2.
In January, Netflix stock was worth over $600 a share, but that price has reduced substantially, and shares were being traded at around $180 on Thursday.
Netflix is currently trading at $181.71 per share, as opposed to $348 per share in April
Ted Sarandos, Chief Content Officer and co-CEO at Netflix s peaks during a conference at the Cannes Lions International Festival of Creativity in Cannes, France
The loss of subscribers is the first time Netflix’s numbers have fallen in a decade, harshly denting their hopes of adding 2.5 million subscribers. The loss has led investors to file a class-action lawsuit, claiming they were misled about subscriber growth.
The lead plaintiff is Fiyyaz Pirani, a trustee of Imperium Irrevocable Trust, which is a Netflix shareholder. The lawsuit seeks ‘compensatory damages’ from Netflix after they failed to hit their subscriber estimates, and broke securities laws in the process.
The lawsuit claims Netflix made ‘materially false and/or misleading statements’ because it ‘failed to disclose material adverse facts about the company’s business, operations and prospects.’
Many believe an obvious solution to some of Netflix’s recent issues would be an adoption of an advertising model to increase revenue, but co-CEO Ted Sarandos has dismissed the idea.
‘For us, it was all about simplicity of one product, one price point,’ he said, adding: ‘I think it can now withstand some complexity,’ Sarandos told the New York Times in May.
‘We make decisions based on the best information we have at the time. They are not always going to be right, but how you help navigate the outcomes, and the urgency you bring to it, is what folks get through the storm. And the storms will come.’
The Netflix logo is seen on top of their office building in Hollywood, California. The streaming giant has lost 70% of its value in recent months as their subscriber count drops
Sarandos called the loss of subscribers ‘disappointing and embarrassing,’ but implied the company needs to look ahead and move on from the failures.
‘How much time do you spend licking your wounds?’ he said. ‘Let’s have that burned into our memory, but we’ve got to move on and move fast.’
While Netflix was ahead of the streaming pack for years, its newfound losses can be attributed to other big companies shifting weight behind their streaming services, including Disney+, Paramount+, HBO Max and Peacock.
Those services have offered high-budget content that has loosened Netflix’s stranglehold over streaming consumers. Much of the content that was previously on Netflix has been taken back by their home companies, furthering the decline in quality of Netflix’s library.
The US media sector and economy as a whole have been weakened by recent recession fears and plunged major companies stocks into bear territory.