Netflix recently announced that it lost 200,000 subscribers, the first time anything like that has happened since the streamer first blew up years ago. Why did it happen? Maybe it’s because Netflix suspended service in Russia following its war of aggression in Ukraine, maybe it’s because Netflix now has more competition than it ever has, or maybe it’s just that people feel over this whole streaming thing.
In any case, Netflix expects the hurt to keep coming; it anticipates losing two million subscribers in the next quarter. And with that comes layoffs; The Verge reports that the company has fired 150 employees and dozens of contractors. Once again, this is a first for a company that has seen pretty much nothing but success and growth over the past decade.
“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” said Netflix spokesperson Erika Masonhall. “So sadly, we are letting around 150 employees go today, mostly US-based. 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. We’re working hard to support them through this very difficult transition. A number of agency contractors have also been impacted by the news announced this morning. We are grateful for their contributions to Netflix.”
For context, Netflix has around 11,000 employees total. And they’re still well ahead of their competitors when it comes to subscriber numbers. But maybe that’s part of the problem; when you’re at the top, there’s nowhere to go but down.
Netflix will crack down on password sharing, create more subscriber options, spend less
What do these changes mean for the service? Well, during the company’s last earnings call, Netflix’s chief financial officer Spencer Neumann said they would be pulling back on spending, which means they’ll probably be turning down the pressure on the firehose of original content they usually supply. Netflix has gained a reputation over the years as a company that greenlights just about anything (although it’s become increasingly willing to cancel stuff). They may be more careful from here on out.
Netflix has also talked about cracking down on password sharing and introducing a cheaper, ad-supported option for subscribers.
So the streaming wars are changing. But is this opportunity for competitors like Disney+ and HBO Max to swoop in, or is everyone in danger?
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