Netflix is laying off about 150 employees, according to an internal memo sent Tuesday and confirmed by the streaming giant. 'These changes are primarily driven by business needs rather than individual performance,' a Netflix spokesperson said.
Most of the cuts, including some in the executive ranks and in the animation division, are in the U.S., and represent about 1.3% of the 11,300 employees reported at the end of 2021. The cutbacks had been expected since Netflix NFLX, +2.17% reported last month that global subscribers declined by 200,000 during the first three months of the year — its first such drop in more than a decade — and executives said they would look to cut costs.
“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S.-based,” a spokesperson for Netflix said in a statement. “These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues.
“Our revenue growth has slowed considerably as our results and forecast below show,” Netflix executives said in an April quarterly letter to shareholders. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds.
During a subsequent earnings call with analysts, Netflix Chief Financial Officer Spencer Neumann said the company wanted to be “prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business” over the next two years.Of late, Netflix has felt the pinch of intensifying competition from media giants like Walt Disney Co. DIS, +3.29%, Apple Inc. AAPL, +2.54%, Comcast Corp. CMCSA, +2.32%, and Paramount Global PARA, +15.35% and AT&T Inc.
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