Fewer Subscribers: Netflix is ​​laying off 300 employees to maintain margin

After Netflix laid off 150 employees in May and terminated many outside contracts, another 300 employees are now being laid off in a second wave of layoffs. Employees in the United States are particularly hard hit. With the layoffs, Netflix wants to cut costs and adapt to reduced revenue growth.

Align the growth of costs and revenues

Netflix has around 11,000 employees worldwide, so recent layoffs affect nearly 3% of the workforce. The streaming service faced terminations Variety confirmed who had previously reported on them. It is not yet known whether there will be any further layoffs, but Netflix had already announced that it would be firing employees in multiple shifts throughout the year. As Netflix continues to invest heavily in the service, layoffs are needed to balance rising costs with slower revenue growth. The margin is expected to remain around 20 percent and Netflix expects investments of around US $ 17 billion for 2022.

First drop in users in 10 years

Netflix first had to announce a drop in subscribers in April after ten years of user growth, and the share price immediately dropped about 25% because not even Netflix was able to shine with positive prospects. After a decline of 200,000 subscribers in the first quarter, the company expected another loss of approximately two million subscribers in the second quarter. Since the beginning of the year, the company’s shares have already lost around 70 percent of their value.

Advertising and fee for shared accounts

In order to attract more users and generate more sales, Netflix wants to take stronger action against illegally shared accounts in the future and also introduce an ad-funded fee. Both could now be implemented much faster than initially anticipated. With the start of the fourth season of Stranger things Netflix was recently able to set a new viewership record – the brand is also expected to advance the range of games. Netflix is ​​hoping the same with the sequel to Squid gamefor which a second season has already been announced.

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