"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," a spokesperson told
AFP.
About 150 employees have been laid off, most of them in the
United States, the spokesperson said, adding that Netflix also cut spending on
contractors.
The moves came just weeks after Netflix reported that it
lost subscribers for the first time in more than a decade.
"Our slowing revenue growth means we are also having to
slow our cost growth as a company," the spokesperson said.
Netflix ended the first quarter of this year with 221.6
million subscribers, slightly less than the final quarter of last year.
The company blamed the quarter-over-quarter erosion to
suspension of its service in Russia due to Moscow's invasion of Ukraine.
A drop of just 200,000 users — less than 0.1 percent of its
total customer base — was enough to send Wall Street panicking when Netflix
reported quarterly earnings in April.
Chief financial officer Spence Neumann said on an earnings
call that Netflix would be "pulling back" on spending for the next
two years, while continuing to invest billions of dollars in the platform
The Silicon Valley tech firm reported a net income of $1.6
billion in the recently ended quarter, compared to $1.7 billion in the same period a year earlier.
Netflix believes that factors hampering its growth include
subscribers sharing accounts with people not living in their homes.
The streaming giant estimated that while it has nearly 222
million households paying for its service, accounts are shared with more than
100 million other households not paying subscription fees.
Netflix is testing ways to make money from people sharing
accounts, such as by introducing a feature that lets subscribers pay slightly
more to add other households.
"When we were growing fast it wasn't a high priority
and now we're working super hard on it," chief executive Reed Hastings
said of account sharing during an earnings call.
"These are over a hundred million households that
already are choosing to view Netflix; they love the service, we've just got to
get paid in some degree for them."
Another factor crimping Netflix growth is intense
competition from titans such as Apple and Disney.
Netflix is looking at adding a lower-priced subscription
tier subsidised by advertising, a model that Hastings had long snubbed.
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