Netflix has confirmed it has laid off about 150 mostly US-based executives as it works to keep costs in check as revenue growth has slowed.
A Netflix representative wrote in an emailed statement: “As we’ve explained about revenue, our slowing revenue growth means we also need to slow our cost growth as a business. So unfortunately we’re letting about 150 employees leave today, mostly in the US. These changes are primarily driven by business needs rather than individual performance, which makes them all the more difficult as none of us want to say goodbye to such great colleagues. We are working hard to support them through this very difficult transition.”
Deadline reported that some of those who let go were creative, including in original content. Reportedly, directors from the original series territory, such as Sebastian Gibbs, Brooke Kessler, and Negin Salmasi, were among those fired. Netflix told businesstraverse.com that Kessler shouldn’t be on this list, though.
Workforce reductions were expected, as the company said in its quarterly report letter to shareholders“Our revenue growth has slowed significantly, as our results and forecast show below.” Netflix reported revenue of $7.87 billion for the first quarter of 2022 and a significant loss of 200,000 subscribers. Analysts had forecast $7.93 billion and 2.7 million subscribers. The belt was tightened as soon as those quarterly figures hit.
Netflix also recently removed a smaller group of around 25 people from its just-launched content marketing operation Tudum — an obvious place to start, given that it’s not essential to Netflix’s core business. But these further layoffs indicate that the streamer is making more strategic cuts to its operations as it looks set to better control its costs in the increasingly competitive streaming media landscape.
Cost-cutting measures were also discussed by Netflix CFO Spencer Neumann during the latest earnings call. He said, “…presumably we’ll be operating for the next 18, 24 months, call it the next two years, roughly at that operating margin, which means we’ll see some of our spending growth across the whole of both content and non-content spending, but our spending is still growing and still investing aggressively in that long-term opportunity. Neumann added, “We’re trying to be smart about it and be careful about pulling back some of that spending growth to reflect the reality of the company’s revenue growth.” to reflect.”
Netflix has been scrambling lately, cracking down on password sharing and announcing a cheaper ad-supported tier in hopes of gaining new subscribers and driving further growth.
Additional reporting: Sarah Perez
Updated 5/17/22 at 6:05 PM with Netflix saying Kessler should not be on the list.