Netflix Announces More Layoffs
Netflix announced it will cut about 3% of its workforce -- for the second time this year. How is the streaming giant planning to recover?
In May, following the company's Q1 report for 2022, Netflix let go of nearly 150 full-time employees and over 70 part-time and freelance employees. Now, the company is cutting its workforce by a similar scale, announcing more than 300 layoffs in several departments across the globe — with U.S. employees taking the biggest hit.
In the wake of the initial layoffs, Netflix stated that the decision was "primarily driven by business needs rather than individual performance." Netflix plummeted 26% in premarket trading and lost 200,000 subscribers in the first quarter. Still, following the subscriber report, Netflix was hit with a class-action lawsuit, with investors claiming the company didn't disclose the scale of damage in the situation, alleging they were provided "false and/or misleading" statements on business and financials.
"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," a Netflix spokesperson told NBC in a statement. "We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition."Since the announcement of the 200,000 lost subscribers, Netflix's value has dropped by nearly 70%.
To combat the streaming giant's dramatic subscriber loss (and with the expectation to lose an additional two million subscribers by the end of the year), Netflix has rolled out a series of initiatives to cut costs and boost revenue. The company has begun testing a policy in Costa Rica, Peru, and Chile that charges users for sharing passwords to mitigate some of the loss by part of some 100 million combined household accounts globally. It also plans to roll out a cheaper, ad-free subscription by the end of the year.
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