Netflix lays off 150 employees, citing slowing revenue growth – TechCrunch

Netflix has confirmed that it has laid off around 150 mostly US-based employees as it struggles to control costs as revenue growth slows.

A Netflix representative wrote in an emailed statement: “As we explained on earnings, our slowing revenue growth means we also need to slow our cost growth as a business. . Unfortunately, we are laying off approximately 150 employees today, mostly based in the United States. These changes are driven primarily by business needs rather than individual performance, which makes them particularly difficult because none of us want to say goodbye to such great colleagues. We are working hard to support them in this very difficult transition.

Deadline had reported that some of those who were fired were in the creative, including original content. Reportedly, directors from the original series area, such as Sebastian Gibbs and Negin Salmasi, were among those fired, according to his report.

Separately, TechCrunch has learned that there have been changes to animation projects, which could impact approximately 70 employees in the animation division. These were not included in the figure of 150.

We asked Netflix about allegations shared on Twitter that the firings had targeted social channels designed to bring marginalized viewers to the service. Such Tweeter had named chains like Strong Black Lead, Golden, Most and Con Todo as being impacted by this downsizing.

Netflix clarified that nothing of its social networks – including those mentioned on Twitter and others (eg Geeked, Netflix Family, Netflix is ​​a joke, etc.) – would be shut down. The company said those channels would continue to be staffed and run by full-time Netflix employees, as they did before.

What happened, however, was that Netflix decided not to renew contracts with certain agencies it previously used to source contractors for its publishing and social arms. With the termination of these agreements, there has been a reduction in the number of contractors working across all of Netflix’s social channels. These contractors are not included in Netflix’s tally of 150 positions terminated, as this figure is specifically tied to the number of Netflix employees. As such, the layoffs haven’t changed Netflix’s makeup from DEI’s perspective, as its reports here focus on full-time staff. The company says people of color continue to make up about 50% of its full-time workforce in the United States and Canada and that women make up about 48% of its staff.

The company declined to say how many contractors were affected by the agency contract terminations.

After publication, the Netflix Twitter account announcement that none of the social channels were shutting down and would continue with “voices celebrating – and from – these communities”.

In a statement, a Netflix spokesperson said, “We are making changes to how we support our publishing efforts, including bringing some of this important work in-house. Our social networks continue to grow and innovate, and we are investing heavily in them.

Agency contract terminations also impacted Netflix’s recent marketing layoffs when 25 full-time employees were laid off. Netflix’s new site, Tudum, had been hit by marketing cuts, as had other marketing roles. (This round of layoffs also included a mix of full-timers and contractors, but 25 was the number of full-timers affected.)

Workforce reductions were expected, as the company said in its quarterly report letter to shareholders“Our revenue growth has slowed significantly, as shown in our results and guidance below.”

Netflix posted revenue of $7.87 billion for the first quarter of 2022 and a significant loss of 200,000 subscribers. Analysts had predicted $7.93 billion and 2.7 million subscribers. A tightening of the belt was on the horizon as soon as these quarterly figures reached.

Cost-cutting measures were also discussed by Netflix CFO Spencer Neumann during the latest earnings call.

He said: “…presumably for the next 18, 24 months, call it the next two years, we’re operating at roughly this operating margin, which means we’re cutting back on some of the growth in our spending across both content and non-content spending, but always increasing our spending and always investing aggressively in this long-term opportunity.

Neumann added, “We’re trying to be smart and careful in terms of reducing some of that expense growth to reflect the revenue growth realities of the business.”

Netflix has been scrambling lately, cracking down on password sharing and announcing a cheaper ad-supported tier in hopes of winning new subscribers and driving growth.

Updated 5/17/22 6:05 PM Updated list of impacted names to remove Brooke Kessler, who was cited by another outlet; 5/18/22, 9:10 a.m. ET with additional insight into layoff measures; and again on 5/18/22, 7:29 PM ET with a Netflix tweet, statement, and additional clarification on the animation department.