Netflix laid off 300 more employees in a second round of cuts on Thursday and confirmed plans to offer a cheaper pay-per-view subscription service amid financial woes as the streaming giant lost hundreds of thousands of subscribers in the first quarter of this year.
A Netflix spokesman told Forbes that the company had laid off employees to better adjust its costs to a “slower revenue growth”, adding that Netflix was “working hard to support” employees in this “difficult transition”.
The cuts, which according to Variety concerned many departments, come after the dismissal of 150 employees from the 11,000 employees of Netflix in May, while the company also announced that it will proceed with new layoffs in the future.
Earlier Thursday, Netflix CEO Ted Sarandos confirmed that the company would begin offering a cheaper, ad-supported subscription service to attract more users.
Netflix “alienated a large portion of customers,” Sarandos told the Cannes Lions Advertising Festival, adding that the company provides a choice for “people who say, ‘I want a lower price and I’ll see ads.’
Netflix stock price has fallen 70% since the beginning of the year.
Netflix announced in April a loss of 200,000 subscribers in the first quarter of 2022, after initially saying it expected to add 2.7 million users, marking its first loss to users in more than a decade.
The company predicted it could lose another 2 million subscribers this quarter. The losses came as Netflix had to compete with a number of newer streaming services, such as Disney +, HBO Max and Paramount.
Disney + announced in March that it would add an ad-supported subscription option later in the year, while HBO Max began offering the cheapest program last year, and another major competitor, Hulu, also has an ad-supported option.
Netflix CEO Reed Hastings has long spoken out against ad-supported subscription packages, but amid the loss of Netflix subscribers in April, Hastings said that although he had previously been “against the complexity of advertising” , was “the biggest fan of consumer choice”.
The company blamed the slowdown in new user growth in part on password sharing, estimating that 100 million households around the world share passwords, including 30 million in the US and Canada.
Source: Capital
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