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Netflix axes 150 staff, cuts contractor roles in social and publishing

Netflix axes 150 staff, cuts contractor roles in social and publishing

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Netflix is laying off about 150 employees across the board. Its spokesperson confirmed the move to MARKETING-INTERACTIVE, adding that most of the employees are US-based. "As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company," the spokesperson said, adding that these changes are primarily driven by business needs rather than individual performance.

"This makes [the changes] especially tough as none of us want to say goodbye to such great colleagues. We're working hard to support them through this very difficult transition," the spokesperson added. The job cuts comes less than a month after Netflix was reported to be cutting staff from its in-house editorial content arm, Tudum.

According to multiple media outlets including The Hollywood Reporter (THR), the recent layoffs represent about 2% of its total headcount. At the same time, Netflix is also reported to be laying off 70 roles from its animation division and cutting down on contractor roles in its social media and publishing channels, THR said. 

In April, Bloomberg reported that the layoffs at Tudum are part of a broader restructuring of Netflix's marketing department. Launched last December, Tudum had only been around for about five months. Meanwhile, TechCrunch reported that Netflix will not be shutting down Tudum and quoted a spokesperson saying that the website remains "an important priority for the company". Several Tudum staff took to Twitter last month to announce that they were laid off. At least four writers tweeted that they were laid off, including an editorial manager.

In April, Netflix reported a loss of about 200,000 subscribers, making this its first dip in paid subscribers in over 10 years, CNBC said. The streaming giant also expects to lose two million global paid subscribers in the second quarter of this year. This pushed the company to mull ad-supported plans after years of pushing back on advertising. Co-CEO Reed Hastings said during the earnings call that providing a cheaper option for consumers would "make a lot of sense".

Hastings explained that he has been against "the complexity of advertising and a big fan of the simplicity of subscription". Nonetheless, he still is a fan of consumer choice and "allowing consumers who would like to have a lower price and are ad tolerant get what they want makes a lot of sense". Netflix expects the ad-supported plans to roll out in the next year or two.

CFO Spencer Neumann also said during the call that Netflix is "pulling back on some of [its] spend growth across both content and non-content spend". "We're trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business," he added. Netflix posted revenue of US$7.87 billion in the first quarter, short of the expected US47.93 billion.

Aside from the recent layoffs, Variety reported that Netflix has also cancelled several animated projects, including Wings of Fire, Antiracist Baby, and With Kind Regards From Kindergarten. However, citing its sources, Variety said the cuts were not cost-related but rather creative. This meant that the projects would still have gone ahead regardless of Netflix's slowing revenue growth.

Related articles:
Netflix axes Tudum content marketing staff as part of marketing restructure
Opinion: Why Netflix's push into ad subscription alone won't solve its issues
Netflix mulls ad-supported plans: Why embracing ads is inevitable for OTT players
Say yes to the ad: Netflix and Disney+ open up to ad support
Let's say Netflix wants to air your brand's dirty laundry. Now what?

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