Netflix lays off 300 more employees as revenue growth slows
Netflix’s revelation that it lost 200,000 subscribers in the first quarter has put further pressure on an already beleaguered tech sector, but leading analyst Mark Mahaney believes the sector’s current weakness presents several opportunities for investors.
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Netflix is laying off about 300 more employees across the company.
The cuts, which represent about 3% of the company’s employee base, come about a month after the streaming company cut about 150 positions following its first loss of subscribers in a decade.
“Today, we unfortunately laid off approximately 300 employees,” Netflix said in a statement Thursday. “As we continue to invest significantly in the business, we have made these adjustments so that our costs increase in line with our slower revenue growth. We are very grateful for all they have done for Netflix and work hard to support them through this difficult transition.”
Netflix had warned investors in April that it would cut some of its spending growth over the next two years.
Spence Neumann, the company’s chief financial officer, said on the company’s earnings call that Netflix was trying to be “cautious” about pulling out to reflect the realities of its business. The company still plans to invest heavily, including about $17 billion in content.
Co-CEO Reed Hastings also said on the call that the company was exploring low-cost, ad-supported tiers in a bid to attract new subscribers after years of ad resistance on the platform.
Netflix is also working to crack down on rampant password sharing. The company said that in addition to its 222 million paying households, more than 100 million households use its service through account sharing.
Shares of the company were down less than one percent in Thursday’s midday session, but are down about 70% since January.