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Netflix Enters Survival Mode

June 27, 2022

Represent 3% of total employees, Netflix is laying off 300 employees across the company. Last month the firm axed 150 positions due to its first subscriber loss in a decade.

“Today we sadly let go of around 300 employees,” Netflix said in a statement Thursday. “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.”

Francesca Gregory, Thematic Analyst at GlobalData, said, “Like many of its increasingly cash-strapped customers, Netflix is tightening its belt. In its latest earnings call, Netflix stoked investors’ concerns when it reported a loss of 200,000 subscribers at the start of 2022. Once a dominant force in the subscription video on demand (SVoD) market, Netflix now appears to be in survival mode, working overtime to cut costs.

“The latest layoffs should come as no surprise to those that have tracked the company’s recent fall from grace. During the pandemic, Netflix’s popularity reached new heights, but the company now faces significantly reduced growth prospects. This is illustrated by its hiring trends, with active jobs decreasing by 61% between December 2020 and June 2022, according to GlobalData figures. The latest layoffs are a reflection of increasingly strong headwinds in the streaming market, with huge content spends and the rising costs of living for viewers proving impossible to balance for streaming platforms.

“Although the increasingly bleak macroeconomic outlook and rising competition make cutbacks more likely, the layoffs have sparked ESG concerns on social media. The latest layoffs come less than two months after editorial staff at Netflix-owned fan site, Tudum, were let go. The site covered issues around inclusion and representation. Following the cutbacks, former Tudum editor Evette Dione suggested that Netflix was laying off staff responsible for increasing diversity, equity, and inclusion.

“Netflix has stated its commitment to promoting diversity and inclusion in its content and workforce, but this commitment has recently been questioned. Further backlash will undoubtedly add momentum to the company’s ongoing subscriber exodus.”

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