Netflix has just announced the layoff of 150 of its employees, a few weeks after the presentation of its catastrophic quarterly results for the start of 2022.
Creation could be directly affected
The people affected by this wave of massive layoffs are mainly based in the United States, with a significant share in the creation division of the platform, both for cinema and for series, reports the specialized media. Deadline.
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Netflix has also made the decision to part ways with at least 26 entrepreneurs working for Tudum, its recently launched site dedicated to original productions. Already at the end of April, the firm announced the dismissal of part of the staff of the latter… Netflix does not hide it, this wave of dismissals is due to its loss of growth:
“As we explained when we released the results, the slowdown in our revenue growth means that we also have to slow down the growth in our costs as a business. That is why, unfortunately, we are now parting ways with approximately 150 employees, mostly based in the United States. These changes are driven primarily by business needs rather than individual performance, which makes them particularly difficult because none of us want to say goodbye to such great colleagues. We are working hard to support them in this very difficult transition. A number of contract agencies were also affected by the news announced this morning. We are grateful to them for their contribution to Netflix.”
Moreover, the media variety Also reports that Netflix is halting production on several shows and movies.
Netflix employees are in low spirits
Netflix is going through the worst crisis in its history after experiencing exponential growth during the Covid-19 pandemic, enthroning the number one streaming service for several years. Between January and March 2022, however, the platform lost around 200,000 subscribers, a first for more than a decade. She explains this situation by the loss of her Russian subscribers, fierce competition as well as the illegal sharing of accounts. As specified Gizmodo however, historical debt and a flawed business model are also beginning to impact the business.
The dismissal of more than a hundred employees was therefore to be expected. During the earnings conference call, Netflix CFO Spencer Neumann spoke of cost-cutting measures in the coming months: “ Presumably for the next 18, 24 months, let’s say the next 2 years, we’ll be operating roughly within that operating margin, which means we’re cutting back on some of the growth in our expenses, both in terms of content and other expenses, but that we continue to increase our expenses and invest aggressively in this long-term opportunity. We try to be smart and careful in reducing some of the expense growth to reflect the revenue growth realities of the business “.
Logically, morale is far from stellar among the company’s roughly 11,000 employees, especially since the company also updated its culture memo to warn future employees that the streaming services ” may not be the best place for those who can’t work on content they don’t agree with.
Netflix owes its downfall in part to tougher competition. Photography: Nicolas J Leclercq / Unsplash
Netflix is looking for solutions
In addition to layoffs, Netflix is looking for other ways to generate more revenue. The platform plans to charge more for those who share their account outside their household, and even plans to launch a cheaper offer on which advertisements will be shown.
The service also wants to start streaming live in order to unlock new possibilities, such as live voting for example. For the time being, it is difficult to know if and when these efforts will pay off, but one thing seems obvious; Netflix employees will still have to tighten their belts. The company expects to lose 2 million more subscribers in the coming months…