Netflix confirmed Tuesday it has laid off about 150 employees following the streaming giant’s struggle with slow growth and subscription loss.
According to a report from Marketwatch, the layoffs in the U.S. included executives and workers in the animation division. The layoffs account for about 2% of Netflix’s total workforce in the U.S. and Canada, Reuters reported.
“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,” company officials said in a statement reported by Marketwatch. “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. We’re working hard to support them through this very difficult transition.”
The news of the layoffs comes just over two weeks after Netflix announced cost-cutting measures, including dropping an animated series created by Meghan Markle the company had planned as well as terminating 25 employees from the marketing department.
Netflix has been navigating troubled waters over the last year and told shareholders in the first quarter report for 2022 that the company has experienced its first loss in new customers in a decade and the harshest decline in overall subscribers since its service began in 2007.
Following the quarterly report from Netflix officials, company stock plunged 35% as shares lost about a third of their value.
According to an article by Reuters, Netflix attributes the loss in customers in part to the war in Ukraine and increasing competition.
In the latest meeting with investors, reported by The Dallas Express, Netflix officials said the company had experienced significant growth during the Covid-19 lockdowns but had already lost 200,000 subscribers globally in the first three months of 2022. The company also blamed account-sharing as a major factor in its slow growth.
“Our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds,” company officials wrote to shareholders in April.
Netflix said at the time of the report that the company had 222 million paying households and estimated the service was being shared with over 100 million additional households.
In an interview following the release of the Q1 report, Netflix CEO Reed Hastings said the company is considering an ad-based model that would offer lower subscription rates for customers.
While company officials have not spoken publicly on the possibility of account-sharing paid plans, Netflix is testing that model out in several markets in Latin America.
The plans allow existing customers to pay a fee to allow other households to share passwords to access the streaming content. The move would enable Netflix to address the situation by recouping some of the revenue lost to account-sharing.
“While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we’ll be holding our operating margin at around 20%,” Netflix officials said.