Netflix confirmed it’s laid off approximately 150 primarily U.S.-based staffers as it works to rein in costs as its top-line growth has slowed down.
A Netflix representative wrote in an emailed statement, “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 U.S.-based. These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues. We’re working hard to support them through this very difficult transition.”
Deadline reported a significant number of those let go were in creative, including in original content. Reportedly, directors from the original series area, such as Sebastian Gibbs, Brooke Kessler, and Negin Salmasi, were among those let go. Some exclusive roles were also impacted, the report said.
Staff reductions had been expected, as the company said in its quarterly letter to shareholders, “Our revenue growth has slowed considerably as our results and forecast below show.” Netflix reported revenue of $7.87 billion for the first quarter of 2022 and a significant loss of 200,000 subscribers. Analysts had predicted $7.93 billion and 2.7 million subscribers. A belt-tightening was on the horizon as soon as those quarterly figures hit.
Netflix also recently cut a smaller group of some 25 people from its just-launched content marketing operation Tudum — an obvious place to begin, given it’s not mission-critical to Netflix’s core business. But these further layoffs indicate the streamer is making more strategic cuts to its operations as it looks to get a better handle on its costs in the increasingly competitive streaming-media landscape.
Cost-cutting measures were also addressed by Netflix CFO Spencer Neumann during the latest earnings call. He said, “…presumably, 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 added, “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.”
Netflix has been scrambling as of late, cracking down on password sharing and announcing a cheaper ad-supported tier in hopes of gaining new subscribers and driving further growth.
Additional reporting: Sarah Perez