Netflix has started making employee cuts, beginning with about 150 positions that are largely U.S.-based, according to a report from Deadline.
The layoffs include some at the executive level including original content, sources told Deadline.
Netflix, in a statement provided to the news outlet, said that the changes are mainly driven by business needs and not individual performance.
“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” the statement from a Netflix spokesperson continued, adding that the 150 mostly U.S.-based employees were let go Tuesday.
The streaming giant’s total staff headcount is around 11,000.
Reducing staff had been expected, and the new details come after Netflix reported its first subscriber losses in a decade when it lost 200,000 net subs in Q1. For the U.S. and Canada, it reported 636,000 paid net membership losses in Q1.
The streamer also projects losing 2 million subscribers in the second quarter. Its most recent quarterly earnings report also disappointed in terms of revenue, when it reported $7.86 billion. That figure was up 9.8% year over year, but slowed significantly from the double-digit year over year growth seen in Q1 of 2021.
“Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds,” Netflix stated in a letter (PDF) to shareholders. “The big COVID boost to streaming obscured the picture until recently.”
As Netflix looks for ways to grow, it’s eying a lower-cost ad-supported tier, which according to recent reports could debut as early as the final quarter of 2022. It’s also looking to monetize households that currently share login credentials with other users, as the company said 100 million homes are using Netflix but not paying for it. It’s experimented in Latin America with an extra $3 monthly charge per additional out-of-home user.
Recent research from Aluma Insights found that if a same password sharing charge were implemented in the U.S. about 12% would likely add at least one out-of-home user who otherwise wouldn’t be monetized. On the other hand, about 13% of adult Netflix users said they would likely cancel the service, although Aluma principal analyst Michael Greeson believes less than half of that would actually do so.