SAN FRANSISCO, United States — Netflix
on Tuesday said it laid off about two percent of its staff in a belt-tightening
move after growth slowed at the once-booming streaming television service.
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"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 subsidized by advertising, a model that Hastings had long
snubbed.
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