Netflix Cuts 300 Workers In Second Round Of Layoffs Amid "Difficult Transition"
A spate of recent layoffs has added to investors' fears that a "soft landing" might be out of the question and prepare for a recession as the Federal Reserve hikes interest rates into a downturn.
Variety reports the latest job cuts have hit Netflix (again), set to cut 300 employees (or 3% of the employee base) on Thursday across multiple U.S. business functions.
"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. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition."
Netflix made the first round of layoffs in May, cutting 150 employees and dozens of contractors and part-time workers. Increasing job cuts come as the online streaming service lost 200,000 subscribers at the end of Q1 and is projected to lose two million in Q2.
Q1 was the first subscriber decline since 2011.
Netflix shares have lost a whopping 75% in value since late 2021.
Variety expands more on Netflix's struggles in the streaming space:
After years of easily winning the streaming wars, Netflix has finally started to take a hit amid the onslaught of new and revamped competitors, including Disney's Disney+, Comcast's Peacock, Paramount Global's Paramount+, and Warner Bros. Discovery's HBO Max. With more new platforms for customers to choose from and splashy and high-budget titles popping up on those services, increased pressure has been put on Netflix to attract and retain subscribers as it's been losing valuable library content to companies bringing their content back home for their own streamers.
Adding to Netflix's struggle is the fact the media sector, not to mention the rest of the U.S. economy, is being pummeled by recessionary fears that have plunged the market into bear territory. But Netflix is not the only Hollywood company enacting layoffs amid the Wall Street chaos. Warner Bros. Discovery has also cut key staffers recently, as looks to reduce costs and its debt load following the completion of the merger between WarnerMedia and Discovery that led to the new company's creation this spring.
Besides Netflix, Layoffs.fyi Tracker shows 832 startups have cut 137,584 jobs in the last two years. Here are the largest layoffs reported:
Notice layoff announcements at startups are accelerating over the last several months as recession fears soar.
Another website, Layoffs Tracker, shows the same:
One can only imagine if this is the beginning of a massive layoff cycle. A negative payroll print could come before the midterm elections as the Fed's hiking sends the economy on the verge of recession.