As it struggles with slowed growth and heightened competition, Netflix has announced yet another round of job cutbacks.
After eliminating 150 employees in May, the streaming juggernaut announced it was eliminating 300 additional positions, or around 4% of its staff, largely in the US.
The actions follow the company’s April disclosure of its first subscriber drop in more than ten years.
As it strives to increase growth, the company is looking into an ad-supported service and tightening down on password sharing.
“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,” Netflix said in a statement on Thursday, adding that it was continuing to hire in other areas.
Despite having 220 million users worldwide and dominating the streaming business, Netflix has recently had to contend with intense competition from the introduction of competitor services like Disney Plus and Amazon Prime Video.
Additionally, the business has started a series of price hikes in the US, UK, and other countries, which have added to its subscriber losses.
After falling by 200,000 earlier this year, the company has stated it expects its subscriber base to decline by another two million in the three months leading up to July.
Saving money is routinely cited as the top reason for discontinuing streaming services in surveys conducted by the Kantar research agency, even in the US, where overall streaming subscriptions have remained stable, in contrast to the UK.
Ted Sarandos, the company’s co-chief executive, revealed to a crowd at a conference in Cannes on Thursday that Netflix was in discussions with other businesses as it looked at new advertising alliances to appeal to price-conscious consumers.
“Netflix as it now exists won’t get any more advertisements. For those who say, “Hey, I want a lower price and I’ll watch advertisements,” we are creating an ad tier “At the Cannes Lions, Mr. Sarandos stated.
The Netflix job layoffs coincide with growing concerns in the US that the employment boom the nation has seen since the epidemic is coming to an end.
The IT industry is showing signs of slowing down, with start-ups laying off about 27,000 staff since May, approximately double the total number of redundancies reported in 2021, according to layoffs.fyi, a website that records publicly disclosed layoffs.
In recent weeks, businesses in the housing industry have also announced hundreds of layoffs.
This week, the chief of the American central bank testified before Congress that while measures to stabilize prices by raising interest rates run the danger of causing a protracted economic downturn, they were still worthwhile.
Jerome Powell, the head of the Federal Reserve, stated, “We’re not seeking to provoke, and don’t think we will need to cause a recession.
But in answer to a query, he acknowledged that it’s “absolutely a possibility”.