A leading streaming company is cutting more employees after posting a net loss of subscribers in the first quarter. Here are the details.
What Happened: Netflix Inc (NASDAQ:NFLX) cut 300 positions Thursday, according to an exclusive report from Variety.
The majority of the job cuts came from the company’s U.S. business and were made across several divisions of the company, the report said.
In May, Netflix cut 150 positions from its workforce of 11,000.
“Today, we sadly let go of around 300 employees,” a Netflix spokesperson told Variety. “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.”
Related Link: Here's Why Netflix Is Bringing Ad-Supported Plan To Consumers
Why It’s Important: Netflix reported its first subscriber loss in over 10 years when it reported a loss of 200,000 subscribers in the first quarter. The company also forecasted a loss of subscribers for the second quarter.
Cost cutting was mentioned by the company earlier this year as it looks to make up for slowing revenue growth.
Netflix is also investing heavily in original content and growing its video game efforts, which could put margins at risk with subscribers leaving.
The streaming market remains highly competitive, and several peers like Paramount Global (NASDAQ:PARA)(NASDAQ:PARAA) and Warner Bros. Discovery (NASDAQ:WBD) platform HBO Max reported gains in subscribers in the first quarter.
In an attempt to gain subscribers and appeal to new customers, Netflix is launching an ad-supported plan later this year, something the company was previously against.
NFLX Price Action: Netflix shares were up 1.63% at $181.81 ahead of the close Thursday versus a 52-week trading range of $162.71 to $700.98. Shares are down 70% year-to-date in 2022.
