Connect with us

Hi, what are you looking for?

Mobile

Netflix sacks 150 staff, cuts spending on contractors

Netflix to drop charges after losing customers

Netflix has said it laid off about two per cent of its staff in a belt-tightening move after growth slowed at the once-booming streaming television service.

“These changes are primarily driven by business needs rather than individual performance, which makes them especially tough, as none of us wants to say goodbye to such great colleagues,” a spokesperson told AFP.

About 150 employees have been laid off, most of them in the United States, the spokesperson said, adding that Netflix also cut spending on contractors.

The moves came just weeks after Netflix reported that it lost subscribers for the first time in more than a decade.

“Our slowing revenue growth means we are also having to slow our cost growth as a company,” the spokesperson said.

Netflix ended the first quarter of this year with 221.6 million subscribers, slightly less than the final quarter of last year.

The company blamed the quarter-over-quarter erosion to suspension of its service in Russia due to Moscow’s invasion of Ukraine.

A drop of just 200,000 users — less than 0.1 per cent of its total customer base — was enough to send Wall Street panicking when Netflix reported quarterly earnings in April.

Chief financial officer Spence Neumann said on an earnings call that Netflix would be “pulling back” on spending for the next two years, while continuing to invest billions of dollars in the platform.

The Silicon Valley tech firm reported a net income of $1.6 billion in the recently ended quarter, compared to $1.7 billion in the same period a year earlier.

Netflix believes that factors hampering its growth include subscribers sharing accounts with people not living in their homes.

The streaming giant estimated that while it has nearly 222 million households paying for its service, accounts are shared with more than 100 million other households not paying subscription fees.

Netflix is testing ways to make money from people sharing accounts, such as by introducing a feature that lets subscribers pay slightly more to add other households.

“When we were growing fast it wasn’t a high priority and now we’re working super hard on it,” chief executive Reed Hastings said of account sharing during an earnings call.

“These are over a hundred million households that already are choosing to view Netflix; they love the service, we’ve just got to get paid in some degree for them.”

Another factor crimping Netflix growth is intense competition from titans such as Apple and Disney.

Netflix is looking at adding a lower-priced subscription tier subsidized by advertising, a model that Hastings had long snubbed.

AFP

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like

Cryptocurrency

A former Chairman of First Bank of Nigeria Limited, Ibukun Awosika, has been appointed on the advisory board of cryptocurrency giant, Binance. According to...

News

Joy Onuorah Automobile company, Mercedes-Benz has recalled 161,000 SUV models due to a hazardous fault in the construction of its window trim bars. Models...

News

A leading Pan-African communications consultancy and press release distribution service, APO media group, said it’s giving qualified journalists an all-expense paid trip to the...

News

Microsoft Inc. has begun the release of its first major update to the current version of its Personal Computers operating system, Windows 11. According...

Advertisement