The layoffs, announced by the entertainment giant on Tuesday, will primarily affect its US office in California. They make up about 2% of its North American workforce. Netflix said the job losses were due to a drop in the company’s revenue. The streaming service is battling an exodus of viewers this year.
“These changes are driven primarily by business needs rather than individual performance, which makes them especially difficult as none of us want to say goodbye to these great colleagues,” the company said in a statement.
It was not disclosed which parts of the business would lose jobs, but the Los Angeles Times reported that recruiting, communications and also the content department were affected. Some people have also disclosed their job loss online.
In April, the streaming giant shocked the industry when it revealed it had lost 200,000 subscribers in the first three months of 2022 and warned that another two million were expected to leave in the next quarter. The news sparked a sell-off from investors, with the company’s shares plummeting 35% in one day. It is now trading at $190, down 46% from its previous premium.
While Netflix has 220 million subscribers worldwide and remains the market leader, it has faced fierce competition in recent years with the arrival of competing platforms such as Disney Plus, HBO and Amazon’s Prime Video.
In its earnings report last month, the company also said the war in Ukraine and the decision to raise its prices in the US had cost subscribers. The withdrawal from the Russian market cost the service 700,000 members, it revealed.
Along with the loss of jobs, the company is also cutting content and pulling back on its own creations. In early May, it canceled development on Pearl, an animated series created by Meghan Markle, in its move to cut costs. Some analysts say that after a surge in subscriptions during the pandemic, Netflix has run out of easy ways to expand business.
The company says it is looking for a cheaper ad-based model and also plans to crack down on password sharing, which has cost 100 million homes.
Netflix is not alone in cutting jobs. In recent weeks, a number of US tech companies, from start-ups to big names like Uber and Twitter, have said they are slowing or freezing hiring or, like online car sales company Carvana, have announced layoffs, citing a slowdown.
Translated matter from BBC – Business.
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