Netflix has laid off approximately 150 employees, just a month after revealing that it was losing subscribers for the first time in a decade.
The layoffs, announced by the entertainment conglomerate on Tuesday, will primarily affect its US office in California. They make up about 2% of its North American workforce.
Netflix stated that the job cuts were caused by the company’s revenue slump.
This year, the streaming service is facing a drop in viewership.
“These changes are primarily driven by business needs rather than individual performance,” the company said in a statement. “This makes them especially difficult because none of us want to say goodbye to such great colleagues.”
Although it was not specified which areas of the business would be affected, the Los Angeles Times reported that recruiting, communications, and the content department were all affected.
Some people also posted about their job losses on social media.
Unfortunately, I was also affected by the Netflix layoff. It was a wild ride, and I’m proud of the work I did, especially being a part of the @netflixgolden launch, and consider myself extremely fortunate to have worked with such brilliant people.
The news sparked a sell-off among investors, with the company’s stock dropping 35% in one day. It is now worth $190 (£152), a 46 percent decrease from its previous premium.
While Netflix continues to be the clear market leader with 220 million subscribers worldwide, it has faced fierce competition in recent years with the arrival of competitor platforms such as Disney Plus, HBO, and Amazon’s Prime Video.
In its earnings report last month, the company also stated that the Ukrainian conflict and the decision to raise its prices in the United States had cost it subscribers.
It revealed that leaving the Russian market alone had cost the service 700,000 members.
Along with job losses, the company is also reducing content and reducing its production. In an effort to cut costs, it canceled the development of Pearl, an animated series created by Meghan Markle, earlier in May.
According to some analysts, Netflix has run out of easy ways to grow the business after a surge in sign-ups during the pandemic.
According to the company, it is considering a cheaper, ad-based model, as well as cracking down on password sharing, which has cost it 100 million households.
Netflix is not alone in laying off employees. In recent weeks, a slew of US tech companies, from start-ups to household names like Uber and Twitter, have said they are slowing or freezing hiring, or, in the case of online car sales firm Carvana, have announced redundancies citing a downturn.