Netflix is cutting 300 jobs as its revenue growth slows amid competition from several other streaming platforms.
The streaming giant revealed the move Thursday. The layoffs come just weeks after it previously slashed 150 positions and warned at the time that more offloading of employees was in store this year.
“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,” a Netflix spokesperson said in a statement provided to the Washington Examiner. “We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”
It has been a rough year for Netflix, which has hemorrhaged value. The company’s stock popped by about 1% after the cuts were revealed Thursday, but, overall, its shares have plummeted.
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Since the start of this year alone, the company has seen nearly 70% of its value erased.
The day after the company announced that it lost some 200,000 subscribers in its first quarter, its stock tanked by a whopping 35%. It is also expected to have 2 million more subscribers depart in the second quarter of this year. The first-quarter decline was the first time in a decade that Netflix said that it lost rather than gained subscribers.
Netflix had been one of the big winners of the pandemic as millions of people across the world were confined to their homes and turned to their TVs and laptops for entertainment. In February 2020, the stock was trading at about $350 per share, and by October 2021, it was punching at about $700 per share. It is now at about $181 per share, erasing all of its pandemic-era gains.
The streaming platform is facing stiff competition from HBO Max, Hulu, Peacock, Disney+, and other streaming platforms, further putting pressure on its subscriber base.
Additionally, fears of a recession have been on the rise as inflation continues to clock in hotter than anticipated, causing the Federal Reserve to hike interest rates at a historic pace.
Coinbase CEO Brian Armstrong announced this month that his company would be laying off nearly 20% of its employees. He cited the likelihood of a recession as part of the reasoning behind the decision.
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“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong said in an email to staff, which he later published in a blog post.
The Conference Board also released a survey that found most CEOs are now predicting a recession or say that their area is already in a recession. And Nomura, a major financial firm, is penciling in a mild recession beginning in the fourth quarter of this year.
