Netflix has laid off about 150 positions today, most of which are U.S. based, because of the slowing of the streamer's revenue.
"As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly US-based. These changes are primarily driven by business needs rather than individual performance, which makes them 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", said a Netflix representative.
The news doesn't come as much of a surprise, as the company's subscriber base dropped last month, which is the first dip in a decade.
In a letter to shareholders, Netflix said, "Our revenue growth has slowed considerably as our results and forecast below show. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds."
Netflix CFO Spencer Neumann also spoke about cuts to come in the future, saying, "…presumably, for the next 18, 24 months, call it the next 2 years, we're kind of operating to roughly that operating margin, which does mean that we're pulling back on some of our spend growth across both content and noncontent spend, but still growing our spend and still investing aggressively into that long-term opportunity. 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."