Today's Edition
(BLOOMBERG)
Netflix is set to cut 6% of its global staff, or about 1,000 positions, as the streaming company struggles with slowing growth.
The bulk of the cuts will be in the product, tech, legal and human-resources teams, co Chief Executive Officers Greg Peters and Ted Sarandos wrote in an email to employees on Wednesday, according to a copy of the memo reviewed by Bloomberg. A representative for Netflix declined to comment further.
"Decisions like these are never easy, and we don’t take them lightly,” the executives wrote. Netflix’s business is "strong and growing, and we remain on track to deliver our full-year forecast,” they added.
Netflix shares were down less than 1% on Wednesday morning in New York. They have fallen 25% this year, compared with a 13% gain for the S&P 500.
Earlier this year Netflix lost out on a bid to acquire Warner Bros. Discovery Inc.
Investors viewed the attempt to buy the Hollywood studio, and secure its trove of established characters and stories, as a sign of underlying weakness. Wall Street has soured on the stock amid rising concerns about growth and weakening subscriber engagement.
Analysts have also expressed concern about Netflix’s lack of new blockbusters, which may be undermining the streaming service’s ability to retain viewers. Engagement grew only 2% in the latest period, and the company received its fewest Emmy Award wins in a decade.
Netflix has been looking for ways to entice its 325 million subscribers to spend more time on the service and attract more advertising revenue, as growth decelerates. As it struggles to keep viewers watching shows beyond their first season, Netflix has expanded into live sports and events, video podcasts and programming from some of YouTube’s biggest creators, intensifying competition with the Google-owned streaming service for talent and viewers.
At the Bloomberg Screentime conference recently, Sarandos acknowledged that Netflix wasn’t growing as fast as he wanted and said "we’re working on making that move faster.”
In the memo, the executives said Netflix will continue to "invest aggressively in high impact areas to improve our service and further drive growth and innovation. Doing that means making focused choices across the business.”
The company employed about 16,000 people at the end of last year, more than half of whom work in the US.
