Netflix lays off 300 more employees despite streaming giant claiming it is ‘investing in the business’ as chaos continues after losing 70% of value and losing 200,000 subscribers
- Netflix has fired 300 employees as the company continues to cut costs
- Streaming giant has lost 200,000 subscribers this year and expects to lose even more
- Shares have plummeted in recent months, exacerbated by the ailing state of the US economy
Netflix has cut another 300 staffers after laying off more than 150 employees as the streaming giant struggled to grapple with a weakened share price.
The company employs 11,000 people worldwide and the cuts have been made in multiple parts of the company as executives try to cut costs where possible.
“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. We are so grateful for everything they have done for Netflix and are working hard to help them through this difficult transition,” a Netflix spokesperson told Variety.
Netflix announced it had lost 200,000 subscribers at the end of the first quarter, causing the company’s value to shrunk by nearly 70%. It also announced it would lose another 2 million subscribers by the end of the second quarter.
In January, Netflix stock was worth more than $600 a share, but that price has fallen significantly and shares traded for about $180 on Thursday.
Netflix currently trades at $181.71 a share, as opposed to $348 a share in April
Ted Sarandos, Chief Content Officer and Co-CEO at Netflix’s Peaks during a conference at the Cannes Lions International Festival of Creativity in Cannes, France
The loss of subscribers marks the first time Netflix has fallen in a decade, severely denting their hopes of 2.5 million subscribers. The loss has prompted investors to file a class action lawsuit, alleging they had been misled about subscriber growth.
The lead plaintiff is Fiyyaz Pirani, a trustee of Imperium Irrevocable Trust, a shareholder of Netflix. The lawsuit is seeking “compensatory damages” from Netflix after failing to meet their subscriber estimates and violating securities laws.
The lawsuit alleges that Netflix has made “materially false and/or misleading statements” because it “did not disclose material adverse facts about the company’s business, operations and prospects.”
Many believe an obvious solution to some of Netflix’s recent problems would be an advertising model to boost revenue, but co-CEO Ted Sarandos has dismissed the idea.
“For us, it was all about the simplicity of one product, one price,” he said, adding, “I think it can withstand some complexity now,” Sarandos told the New York Times in May.
“We make decisions based on the best information we have at the time. They won’t always be right, but how you help navigate the results, and the urgency you add to them, is what gets people through the storm. And the storms will come.’
The Netflix logo can be seen atop their office building in Hollywood, California. The streaming giant has lost 70% of its value in recent months as subscribers drop
Sarandos called the loss of subscribers “disappointing and shameful,” but suggested the company should look ahead and move on from the failures.
“How much time do you spend licking your wounds?” he said. “Let’s keep that burning in our minds, but we’ve got to move on and act fast.”
While Netflix was years ahead of the streaming package, the new losses can be attributed to other major companies shifting weight behind their streaming services, including Disney+, Paramount+, HBO Max and Peacock.
Those services have offered high-budget content that has unleashed Netflix’s stranglehold on streaming consumers. Much of the content previously on Netflix has been taken back by their home companies, further degrading the quality of the Netflix library.
The US media sector and the economy as a whole have been weakened by recent recession fears and have sent large company stocks into bear territory.