Netflix logo depicted on a screen with a remote in front
Source: Deccan Herald

Netflix lays off 300 employees in cost-cutting drive
Earlier this week it had stated that it was bracing for a second round of layoffs

Old logo of Netflix depicted in front of a screen
In its second round of layoffs, Netflix lays off 300 employees in cost-cutting drive.
Source: the Edge Markets

On Thursday, June 23, Netflix Inc stated that it went on to lay off 300 employees in its second round of job terminations. The streaming giant fired about 4% of its workforce in order to cut necessary costs following it losing a significant number of subscribers a while ago.

Reportedly, this step from the company mostly impacted their workforce in the US following it cutting around 150 jobs last month. Netflix faced a significant loss a couple of months ago when it lost about 200,000 subscribers for the first time in a decade.

On Thursday, June 23, the streaming giant gave in a statement regarding the development. It stated as they continue to ‘invest significantly in the business’ they came to this adjustment to make sure their costs grow at the pace of its ‘slower revenue growth.’ Though it previously said that the number of terminations would be same as last time -150, the number went up to 300 in this round. The staff affected by the layoffs were not informed until two days after Netflix first announced these terminations. As of this year, the company is maintaining a global work force of about 11,000 staffers.

“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,”

Evidently, the world’s leading video streaming giant has come under significant pressure in the past few months. This is owing to the inflation in the economy, the Russian invasion of Ukraine, along with the aggressive competition in the streaming industry.

Despite its lead in the streaming world, it received tight competition from companies such as Comcast, Disney and Warner Bros. Discovery. They came with platforms such as Disney Plus, HBO Max and Peacock, putting intense pressure on Netflix to try harder to retain its existing viewers and attract newer customers. As we know, the media sector is facing considerable challenges of its own with fears of recession. Moreover, it has even compelled companies like Warner Bros. Discovery to conduct layoffs.

Following its drop in subscribers, Netflix went on to forecast even serious losses from the present period. In January, the shares of the streaming giant was trading at north of $600, and going down to hover at about $175 a share on Monday, June 20. Resultantly, the platform aims to come up with a cheaper, ad-supported subscription plan for which it is consulting various other companies.