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Netflix fires 300 more employees, blames slump in paid subscribers for slow revenue growth

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HIGHLIGHTS :

  • Netflix is laying off around 300 employees across the company, CNBC confirmed Thursday.
  • The cuts come about a month after the streaming company eliminated about 150 positions in the wake of its first subscriber loss in a decade.
  • Netflix had warned investors in April that it would be pulling back on some of its spending growth over the next two years.

Netflix is losing paid subscribers rapidly

It is losing paid subscribers rapidly and that is one of the primary reasons why the company’s revenue growth has slowed down over the years. The streaming giant confirmed that it has conducted the second round of layoffs and has let go of close to 300 employees. Netflix had previously laid off close to 150 employees due to poor earnings and slow revenue growth. A drop in its stock price is also one of the reasons behind the company’s downfall.

In the first round of layoffs, Netflix fired 150 employees

As per The Variety, Netflix had previously acknowledged plans to trim expenses due to slowing growth. The company confirmed that it has “sadly let go of 300 employees”.The report reveals that most job losses have taken place in the US and have happened across multiple business divisions. Variety reports that Netflix has a total of 11,000 employees. So the latest round of layoffs has affected approximately 2 percent of its workforce.

“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,” the Netflix spokesperson said in a statement on Thursday. “We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”

In the first round of layoffs, Netflix fired 150 employees. The company stated that the decision to remove people was more business-driven rather than individual performance. It reported $7.87 billion in Q1, which was short of Wall Street’s estimates of $7.93 billion.

Netflix said in February it had lost 2 lakh subscribers globally

The company said in February it had lost 2 lakh subscribers globally at the start of 2022, and expected a drop of 2 million users in the upcoming quarter.
The company attributed this drop to a range of factors, including increased competition, the economy, the war in Ukraine, and the large number of people who share their accounts with non-paying households.
“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,” the Netflix spokesperson said in a statement on Thursday. “We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”

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