Netflix is having a hard time right now. Or rather, it’s going through a transition period. Better yet, entering a new phase.
Today, the streaming service laid off 150 employees, comprising about 1.3% of the company’s 11,300 or so total workers. This most recent round of layoffs was first reported by Deadline. It comes after weeks of tumult, and follows earlier layoffs from Netflix’s blog, Tudum.
In an emailed statement to Gizmodo, a Netflix spokesperson wrote the following:
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 US-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.
In April, Netflix released its 2022 first quarterly earnings report, which revealed it had lost 200,000 subscribers. That number drop was the first in a decade for the company. Then, following the earnings report, the streaming platform’s stock plummeted.
Netflix mostly blamed its losses and slowed revenue on their ban of Russian users, unauthorized password sharing, industry competition, and high household penetration (i.e. there’s simply no one left without the ‘Flix). However, password sharing and subscriber dips are probably not the whole story. Historic debt and a flawed business model seem to have also taken a toll.
(Following the publication of this story, a Netflix spokesperson reached out to reaffirm that, despite past financing debt, Netflix is now “cash positive.”)
In a public attempt to shore up revenue (and probably calm investors), Netflix is exploring ways to limit password sharing. The company is also looking to add a paid subscription tier that includes ads within the year. Plus, the platform is exploring adding live streaming to certain shows and events. Unfortunately, the 150 employees let go in Tuesday’s cuts won’t be around to reap the benefit if any of these efforts pay off.
Update 5/17/2022, 6:08 p.m. ET: This post has been updated with additional comment from Netflix.