Netflix said it was cutting another 300 jobs – about 4% of its workforce – mostly in the US, after laying off 150 people in the month of May. The measures are coming after the company reported its first loss of subscribers in more than a decade in April. The company is exploring an ad-supported service and cracking down on password sharing as it tries to spur growth.
“While we continue to invest significantly in the business, we have made these adjustments so that our costs grow in line with our slower revenue growth,” Netflix said in a statement Thursday, adding that it continues to hire in other areas.
While Netflix has 220 million subscribers worldwide and remains the clear leader in the streaming market, the company has faced fierce competition in recent years with the launch of rival platforms like Disney Plus and Amazon’s Prime Video. The company has also recently embarked on a series of price hikes in some countries, which has further contributed to its loss of subscribers.
The company said it expects its subscriber count to drop by another two million in the three months to July, after falling by 200,000 earlier this year. Research by the company Kantar consistently identifies saving money as the number one reason for canceling streaming services – even in the US, where overall streaming subscriptions have held steady, unlike the UK.
On Thursday, Ted Sarandos, the company’s co-chief executive, told an audience at a Cannes conference that Netflix was talking to many companies as it explores new ad partnerships to appeal to price-sensitive audiences.
“We are not adding ads to Netflix as you know it today. We’re adding an ad layer for people who say, ‘Hey, I want a lower price and I’ll watch ads,’” Sarandos said at Cannes Lions. The Netflix job cuts come amid growing concerns in the United States that the job market boom the country has enjoyed since the start of the pandemic is coming to an end.
Signs of a slowdown are particularly evident in the tech sector, where startups have cut nearly 27,000 workers since May — roughly double the number recorded in 2021, according to layoffs.fyi, which tracks publicly announced layoffs. Real estate companies have also announced hundreds of cuts in recent weeks.
The U.S. central bank chief told members of Congress this week that his efforts to reduce rapidly rising prices by raising interest rates risked triggering a sustained economic slowdown, but were worth it to restore stability. of prices. “We’re not trying to provoke and we don’t think we need to provoke a recession,” Federal Reserve Chairman Jerome Powell said. However, he admitted in response to questioning: “It’s certainly a possibility.”
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