Netflix shares are way down than usual and the cost-cutting is now in action. The streaming company laid off 150 people a couple of months back and has now bid adieu to 300 more. Variety reported that the cost-cutting measure will continue year-long and staff will be reduced further.
Netflix Recent Layoff: What does it mean?
“Today we sadly let go of around 300 employees. 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,” a Netflix spokesperson told Variety.
The message seems sugarcoated at most but firing employees is a new trend at big tech companies. Meta, Twitter, Snapchat, etc are all in the same boat. With the concern of a looming recession and reduced profits, companies are trying their best to stay afloat, even if it means cutting down the workforce.
Netflix’s dipping subscriber base is the cause of ultimate concern for the company. Over the years, the subscribers have slowly migrated to other streaming services. It is primarily due to fresh and engaging content, something which Netflix is constantly fumbling with. Netflix is even thinking of introducing an ad-supported plan to replenish some of the revenue loss due to leaving subscribers.
The 300 people layoff won’t do much good unless Netflix comes up with great shows as it did before. It must also loosen its stance on password-sharing, which is one of the major causes of paying subscribers leaving the platform.
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Password sharing is what helped many people use Netflix and grow its subscriber base, but Netflix considers it a loss of paying subscribers. It even began rolling a payment drive in Peru and asked users to pay additional charges for sharing the account with someone who is not a family member.