Netflix lays off 300 more employees in latest round of cuts

NEW YORK (NYTIMES, BLOOMBERG) – Netflix laid off another 300 employees as the streaming giant seeks to bring costs under control amid uneven subscriber growth.

The job losses are across the company, with most affected workers based in the United States. The cut is twice as large as the one Netflix made last month.

“Today we sadly let go of around 300 employees,” the company said in a statement. “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.”

In April, the company announced that it had lost 200,000 subscribers and said that it anticipated losing 2 million more in the second quarter of this year. It has nearly 222 million subscribers in total.

The company’s stock price has fallen about 70 per cent this year.

To address the company’s financial struggles, Netflix has said it will introduce a lower-priced subscription tier that includes advertising. The decision is a significant strategic pivot for the company, which had rejected adopting ads for years. Executives at the company have said they hope to introduce the advertising model by the end of this year, and Netflix is in talks with several companies that may help build out the business.

Although the ad-supported service could increase revenue, some Wall Street analysts have cautioned it could also cannibalise Netflix’s existing user base, with current subscribers trading down for a lower-priced tier.

“Ad-tiering could serve as a way for consumers across all income brackets to extend their streaming budget by trading down to subscribe to an additional service, benefiting Netflix’s competitors much more than Netflix itself,” analysts at Bank of America wrote in a note to investors on Thursday.