Netflix has announced major job cuts weeks after it admitted a drain in subscriber numbers was hitting outlook and revenues.
The streaming giant said as many as 150 staff would leave the company. The affected employees are mainly from the US and Canada, comprising about 2 percent of Netflix's North American workforce.
Changing Business Conditions
Netflix said in a statement that the job cuts are a reflection of changing business conditions, and not necessarily of individual performance. The company added that the job cuts are a direct result of a slump in revenue.
"These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues," the statement said.
According to the Los Angeles Times, roles in recruiting, communications and content will be affected by this round of job cuts.
Loss of More Subscribers Anticipated
Netflix disclosed in April that the customer base shrank by 2,00,000 subscribers during the January-March period, which was the first time in a decade it reported a net loss in the customer base.
The news set off a massive sell-off in its stock, with shares plunging 35 percent at one point.
The major reason behind the sharp drop in numbers was the streaming service's decision to pull out from Russia in the aftermath of Moscow's Ukraine invasion. Netflix lost a whopping 700,000 subscribers after it pulled out of Russia.
Netflix is anticipating as many as 2 million subscribers to leave it in the April-June period.
Netflix has seen stiff competition in the market in the last two years, although it is still the market leader with 220 million subscribers globally. Meanwhile, rivals like Disney Plus, HBO Max, Peacock, Paramount Plus, Apple TV Plus and Discovery Plus have been making steady inroads into the fast expanding streaming market.
"Consumers have always had many choices when it comes to their entertainment time ... competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering," Netflix said in January after reporting the Q4 earnings.
Another factor eating into Netflix's profitability is account sharing. The company estimates that nearly 100 million households watch the service for free by sharing user names and passwords. In the US and Canada alone, as many as 30 million watch Netflix using the account of a family member or friend.
Netflix has been mulling other ways to stop the revenue drain, such as cutting down on content. Earlier this month Netflix said it was cancelling Meghan Markle's animated series Pearl. The streaming giant has also mooted ads on the platform to boost revenues.