'Subscriber Decline and Stock Drop' Netflix Lays Off 150 Employees

"Not Due to Individual Employee Performance... Company-Wide Cost Reduction Needed"
Subscriber Count Expected to Decrease by 2.5 Million in Q2

Netflix, which is experiencing hardships such as subscriber decline and stock price drop, has laid off 150 employees. The photo shows the Netflix logo on a smartphone screen. Photo by Yonhap News

[Asia Economy Reporter Kim Jung-wan] The global online video service (OTT) industry, which experienced rapid growth during the prolonged COVID-19 pandemic, is now facing hardships such as a stock price crash due to a decline in subscribers following the recovery of daily life. Recently, Netflix laid off about 150 employees.

According to local media including The Wall Street Journal (WSJ) and Engadget on the 17th (local time), Netflix laid off approximately 150 employees, accounting for about 2% of its total workforce at its U.S. headquarters.

Netflix explained to the press that this layoff was "due to the company's need to reduce costs rather than the performance of individual employees." It is known that many of the laid-off employees were in senior positions.

Earlier, Netflix also laid off about 25 employees in the marketing department last month. At the Q1 earnings announcement on the 20th of last month (local time), Spencer Neumann, Netflix's Chief Financial Officer (CFO), stated plans to reduce some of the company's expenditures over the next two years.

At the Q1 earnings announcement, Netflix revealed that its subscriber count decreased by 200,000. This was the first time Netflix's subscriber base had declined since 2011. Netflix's stock price, which reached an all-time high of $690 last October, plummeted to $190 on the day.

Furthermore, Netflix announced that it expects a decrease of 2.5 million subscribers in Q2. The causes of the subscriber decline were identified as △ withdrawal from business in Russia due to the Ukraine war △ account sharing among members △ fierce competition in the OTT industry.

Meanwhile, Netflix is pursuing measures such as introducing a cheaper subscription service with ads and restricting account sharing to improve its performance.