After losing subscribers for the first time in a decade, Netflix cuts spending and wants to test a cheaper plan with advertising
Things are difficult for those who work in the Netflix. With disappointing financial results, the company fired 300 employees this Thursday (23). The measure, according to the company, is to be done expense adjustmentsas revenues grew at a slower pace than expected.
This Thursday’s cut represents about 4% of all Netflix employees and largely affects U.S. employees.
And this is not the first round of layoffs: 150 people were laid off in May. Most were part of the company’s marketing division, including the Tudum website, a project aimed at fans of the original productions.
One of the pioneers of streaming, Netflix has seen its consumer base shrink for the first time in a decade. In the first quarter 2022 report, the company had 200,000 fewer subscribers. For the next period, the expectation is that 2 million will leave the platform.
The company pointed to several factors for the decline: more competitors, economic factors, the war in Ukraine and the sharing of accounts with people who do not pay.
according to caretaker, activists and former employees reported that most of the laid-offs were working on diversity initiatives. They had been promoted by the company since 2020, when George Floyd’s death and Black Lives Matter protests drew attention to matters of representation. Netflix denies these reports.
Netflix will begin testing ads
One of the ways to compensate for the loss of subscribers is to find another source of income: display advertisements about the service. This is getting closer and closer to becoming a reality.
Ted Sarandos, co-CEO of Netflix, confirmed this Thursday (23) during the Cannes Lions advertising festival that the company will begin testing a cheaper plan with advertising.
The company has already spoken with partners to enter the world of ads. Sources say Comcast, NBCUniversal and Google would be among them.
Recently, people connected to Roku also commented on a possible purchase of the company by Netflix. The goal would be the same: to strengthen the advertising platform. Roku earns seven times more from advertising than from selling devices.
Analysts, however, are cautious about the launch of this new plan. They fear that current Netflix subscribers will switch to the cheapest package to save money, causing the company to lose more money.
With information: The New York Times, The Guardian, Time.
In the fall, Netflix fires 300 employees and mentions ads again