June 6, 2023

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Netflix offers 300 employees in a new round of cuts – The Hollywood Reporter

Netflix offers 300 employees in a new round of cuts - The Hollywood Reporter

Netflix It has cut an additional 300 employees — about 3 percent of its workforce — marking the latest round of major layoffs at the embattled broadcast giant.

“Both Ted and I regret that we did not see our revenue growth slow down earlier so we could ensure a more gradual readjustment of the business,” read a note sent to staff Thursday from Reed Hastings and Ted Sarandos, co-chairs of Netflix.

About 216 of the affected employees were in the United States; 30 employees were laid off in Asia Pacific countries; 53 in Europe, Middle East and Africa; The note stated that 17 countries in Latin America.

“We know these two rounds of layoffs have been very difficult for everyone – causing a lot of anxiety and uncertainty. We plan to return to our usual course of business more in the future. Given that we are cut in some areas, we also continue to invest Large amounts of content and people: Over the next 18 months, our employee base is planned to grow by about 1.5 thousand to reach 11.5 thousand.

A Netflix spokesperson said in a statement that the cuts were made so that “streaming costs are increasing in line with our slower revenue growth.”

In May, Netflix was laid off 150 employees A Netflix spokesperson said at the time that it was due to “slowing revenue growth,” not “individual performance.” Of those employees affected last month, 106 were employees of Netflix’s Los Angeles office, according to a report sent to the California Department of Employment Development. In addition to full-time employees, many of whom are in the animation division, Netflix has also cut dozens of contractors who work across the company’s social media and publishing channels, including those dedicated to underrepresented identities such as Strong Black Lead, Con Todo, Most and Netflix Golden.

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The cuts to the number of employees came shortly after another round of layoffs that saw the loss of many contractors and full-time employees of the company. todom, a site for Netflix fans operated by the company’s marketing department. The company launched Tudum last December to produce consumer-oriented digital content around its own titles like Bridgerton, Stranger ThingsAnd the love is blind And the sunset sale.

The move comes as Netflix continues to grapple with and respond to an increasingly challenging streaming environment, competing with tech giants like Amazon Prime Video and Apple TV+ as well as studio conglomerates platforms like Disney+, Hulu, Paramount+, HBO Max and Discovery + . (In the April “State of Play” survey by Nielsen, about 46 percent of respondents answered that “It is difficult to find video streaming content that they want to watch because there are so many streaming services available.”)

On April 19, Netflix revealed that it lost 200,000 subscribers in the first quarter of the year, well below its own subscriber addition expectations. The last time Netflix revealed a subscriber loss was in late 2011, and for much of the past decade, the company has been seen as a growth story that has led the industry toward a streaming-focused present. The broadcast, which has about 222 million subscribers globally, provided lower expectations for the next quarter, saying it was preparing to lose another 2 million subscribers.

It has responded by looking at ways to control costs and revive subscriber growth.

When asked on an earnings call about spending nearly $18 billion on content for this year, Sarandos said, “We will continue to increase content spending compared to previous years.” CFO Spencer Newman added that Netflix is ​​”backtracking” on “content and non-content spending growth” while “we continue to increase our spending and continue to invest aggressively.”

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The company also said it was working on ways to eliminate password sharing, noting that 100 million households share the service. It has signaled a massive expansion outside its core subscription business model by offering mobile games – including adaptations from its own series such as Queen’s gambit And the Stealing money – Plus plans for a cheaper ad-supported tier. (Netflix’s “Basic” subscription plan is currently $9.99 while its “Standard” plan is $15.49.)

“We’ve left a huge cross-section of customers off the table, which are the people who say, ‘Hey, Netflix is ​​too expensive for me and I don’t mind advertising,'” Sarandos He said On June 23 session at Cannes Lions Festival with Kara Swisher. “We’re adding an ad category; we’re not adding ads to Netflix as you know it today. We’re adding an ad layer for people who say, ‘Hey, I want a lower price, I’m going to watch ads.'”

Since January 3, the first trading day in 2022, stock in the streaming giant has fallen by nearly 70 percent, from $597.37 per share to $177.39 per share as of June 23.

On June 14, the service received a stock rating downgrade from Standard Analyst Matthew Harrigan dropped the company from “hold” to “sell” with a target price of $157. A few days ago , Goldman Sachs Analyst Eric Sheridan downgraded the company from “neutral” to “sell” and lowered his price target for the company from $265 to $186, saying, “We have concerns about the impact of the consumer recession as well as increased levels of competition” from outflowing rivals.

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Alex Webrin contributed to this report.