Instances of companies laying off employees to survive tough market conditions this year have been more common than one would have liked, and things do not look to be changing anytime soon.
While the pandemic and subsequent lockdowns ensured that streaming giant Netflix grew and got millions of new sign-ups (36 million new subscribers were added in 2020 and it ended the year with 221.8 million subscribers). It however failed to maintain this growth in the post-pandemic period as it fell short of expectations this year and in Q4 2021.
Now the streaming giant has laid off several employees – nearly 300 – in its second round of reductions this year, and most of it includes its workforce in the US, Variety reports. This also comes after it had laid off around 150 employees – 2% of its US workforce – last month in order to cut down on costs as its growth slowed down and it lost subscribers for the first time in over a decade.
“Today we sadly let go of around 300 employees,” a Netflix spokesperson said. “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. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”
It lost nearly 200,000 subscribers at the end of Q1 2022 and is expected to lose another 2 million subscribers in the second quarter. For now, it continues to rein in its costs to keep its margins at 20%.
While most of the layoffs in May included employees and dozens of contractors and part-time workers, the current layoff spans across multiple business functions and teams across the Asia Pacific, Europe, Middle East, Africa, and Latin America, including the company’s legal and product divisions. It seems that the tough year will only get tougher as Netflix hinted in May that more rounds of layoffs would be coming in 2022.
The streaming giant, which has a global workforce of nearly 11,000, has seen its value drop by nearly 70% this year. It is currently trading at $181.71, which is a steep fall from the over $600 it was trading at the beginning of the year.
Its tough run is not entirely Netflix’s fault as competitors such as Disney+, HBO Max, and Paramount+ are slowly gaining the market share, and there are fears of an economic recession as stocks continue to plummet and startups struggle to raise funds.