Netflix applied a massive cut in personnel, after reducing its number of subscribers
The fierce competition between streaming audiovisual content companies has mainly affected Netflix, which has seen the need to apply strong internal readjustments to face the consequences of the reduction in its number of subscribers.
The company announced the elimination of about 300 jobs, as part of a second round of layoffs, which last month already left about 150 employees, plus some contractors.
The consequences of the bad moment that happens Netflix
Netflix is not going through a hot streak. After acknowledging that they had suffered the loss of 200,000 subscribers during the first quarter, with the projection of also losing another two million subscribers in the following period, the company has suffered a 70% reduction in its value.
This condition inevitably translates into economic factors. For reference, Netflix shares were trading around $600 in January. Yesterday, these same shares opened at a price close to $180.
The response to this crisis, seeking to resist in some way while restructuring to emerge, was a second round of layoffs, doubling the number of employees laid off during the previous month. Although this measure also affects Netflix’s international divisions, the layoffs were mainly concentrated in the United States, throughout different company teams.
This recent determination was made known by Variety. In that publication, the dismissal of around 300 employees this month was confirmed through a Netflix spokesperson. “While we continue to invest significantly in the business, we have made these adjustments so that our costs grow in line with our slower revenue growth. We are very grateful for everything they have done for Netflix and we are working hard to support them during this difficult transition.”said the company spokesperson.
The volume of these layoffs is an example of the consequences that the slowdown in revenue growth leaves in a company of this volume, plus the historic loss of subscribers that the company registered for the first time in a decade. And although platforms of this class usually experience subscriber leakage, this indicator is balanced by the arrival of new users. In the case of Netflix, even applying this analysis formula, the result shows negative figures.
Regarding the future of the company, the first known information does not shed light on possible new layoffs. A report of The Hollywood Reporterpoints out that according to what they were able to corroborate, the co-executive directors of Netflix, Reed Hastings and Ted Sarandos, addressed the company’s staff by means of an email in which they indicated that “we plan to return to a more normal course of business in the future”.
The challenge for Netflix is to come back to find a focus for their business that allows them to achieve the profitability they need. In lack of attempts at least they don’t stay, after implement games on your platform, offer cheapest subscriptionsand even incorporate live videos in the future, according to an external report.
