Streaming platform, Netflix has laid off 150 full-time employees in the United States as a fallout of a significant drop in its revenue. According to reports, the recent layoff affects employees across the organization. This includes 70 part-time positions in the animation, social media, and publishing divisions.
At least 26 contractors working on the company’s fan-focused Tudum website, which acts as an addition to Netflix’s content were also affected. Last month, the Tudum subdivision was exclusively impacted by a similar fate, with over 25 roles in the marketing section.
This new decision is coming less than a month after the streaming giant laid off at least ten full-time employees and contractors from its editing and marketing departments. The Netflix management has explained that the choice is unrelated to individual performances. They also said that the laid-off employees will be compensated.
Netflix’s revenue income has been on a decline recently. For the first time in a decade, it disclosed a sharp reduction in subscribers in the first quarter of 2022, with a net loss of 200,000 streaming clients. The business also forecasted a 2 million subscriber drop in the second quarter. On April 20, the company’s worth dropped by $54 billion as a result of this.
Many variables are being explored as causes for the company’s income loss. This includes the Russian invasion of Ukraine as Netflix shut down all of its services in Russia in March 2022.
Similarly, Also plaguing the service, analysts say, is a lack of must-see content.
Netflix boasts as the original disrupter in entertainment. But the streaming landscape is changing. Entrants like Disney+ and HBO Max sport their own compelling services, the development could force the company to adopt some of the revenue streams that have made the traditional media companies successful for decades: theatrical distribution, advertising-supported subscription services and perhaps consumer products.
While Netflix used to be the first stop for consumers, recent offerings like “Severance” from Apple TV, “The Dropout” on Hulu and “The Gilded Age” on HBO Max have prompted consumers to consider where the hits are rather than stick with their first streaming subscription.
Netflix’s possible next move
Netflix says that it is currently seeking ways to re-ignite its status quo by devising fresher strategies.
Netflix’s Chief Financial Officer, Spencer Neumann, explained that the firm is seeking to conserve money and that expenditure will be cut back for the next few years. In addition, the streaming platform is considering a cheaper ad-supported option for its users, which is expected to come later this year.
Netflix is also trying to clamp down on password sharing among households — a worldwide phenomenon that the company believes accounts for 100 million unauthorised users. To combat this, the company started testing solutions in three markets in Latin America, with one option allowing current members to pay for additional households. Netflix boasts of 222 million “paying households,” but it thinks that over 100 million “additional households” use the service on shared devices.
But the company’s forecast of a loss of 2,000,000 subscribers for its second quarter shows that the slowing growth is likely to continue in the coming days. Similarly, the company plans to provide a few more payment options for account sharing users. This has the potential to help them resurrect their declining revenue.
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