Netflix has laid off a further 300 employees after last month letting go of 150, mostly in the United States, amid slowing growth.
The job cuts, which the company said in May were driven by business needs and not employee performance, come as Netflix subscriptions substantially fell for the first time in a decade.
A Netflix spokesperson told The Hill the streaming company will continue to “significantly” invest in its business and that the new job cuts reflected the company’s need to balance costs with the 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,” the spokesperson said, referring to the laid-off workers.
Around 150 employees, or roughly 2 percent of the company’s workforce, were already laid off in May in the United States and Canada.
A cheaper, ad-supported tier is one possibility Netflix was considering offering customers as a result of its declining growth, Reuters reported.
“We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business,” Netflix Chief Financial Officer Spencer Neumann told investors during an earnings call.
Among the headwinds Netflix said it faces is a more crowded streaming marketplace, with Amazon and Disney launching platforms, and macro factors such as sluggish economic growth, increasing inflation, conflict in Europe, and COVID-19.
Given that Netflix is mostly accessed via internet-connected televisions, the number of households that haven’t taken the devices up is one factor out of the company’s control that is affecting the speed of its growth, it said. The cost of data is another factor the company can’t control.
100 Million Shared Accounts Slows Growth
In April, the company told shareholders that another reason revenue growth had slowed is because of Netflix’s “relatively high house hold penetration,” which included families sharing accounts (pdf).
Netflix told shareholders that account sharing is the second biggest factor contributing to slowing growth.
Around 222 million households pay for Netflix, which the company said is mostly accessed via smart televisions connected to broadband internet. But the company estimates that Netflix is being shared with over 100 million additional households, including 30 million in the United States and Canada.
“Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets—an issue that was obscured by our COVID growth,” the company said in a letter to shareholders in April.
The company has been testing a strategy to monetize sharing by giving customers in Chile, Peru, and Costa Rica the option to add a profile for up to two people who don’t live with them for an additional fee.