The company’s Q1 2022 earnings report, which was released late last month, sent the company plummeting 26% in premarket trading despite a 10% increase in quarterly revenue.
The culprit was the perfect storm of a record loss of more than 200,000 subscribers, a crackdown (and subsequent pushback) on password sharing, subscription price hikes and the withdrawal of billionaire investor Bill Ackman, who put an estimated $1.1 billion into the company just three months prior.
All of this culminated in the company being slammed with a class-action lawsuit alleging that the company misled investors as to how bad the subscriber situation really was and a couple of dozen employees being laid off from the company’s fan subsidiary, Tudum.
Unfortunately, it seems that the Tudum layoffs were only the beginning of the streaming giant’s attempt to cut costs and salvage losses, as it announced Wednesday that 150 full-time employees and more than 70 part-time and freelance employees will be getting the boot.
“As we explained [in reporting Q1] earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” a Netflix representative confirmed to Variety. “So sadly, we are letting around 150 employees go today, mostly U.S.-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.”
These widespread layoffs account for around 2% of Netflix’s total workforce in the U.S. and affect all departments, with the part-time employees being based in animation and freelance positions in social media and publishing.
Many laid-off employees took to social media and alleged that those leading diversity initiatives and employees from marginalized communities were among the majority of those being let go.
Netflix cut all of its diversity departments including Strong Black Lead, Asian American-focused Golden, Latinx-focused Con Todo, and LGBTQ-focused Most pic.twitter.com/GqebuZKFRB
A lot of the “diversity” that worked at Netflix were let go today it seems like as I scroll on social. A former Netflix writer who was part of the layoffs said, “Diversity and the editorial staff are the first on the chopping block when it’s time to make a sweep.” #Netflixlayoffs
— Doc Louallen (@LouallenDoc) May 18, 2022
Netflix does better than a lot of companies at their DEI numbers, BUT the layoffs didn’t touch the least diverse part of the company: the tech side. Are they tech, or entertainment? Both—the diversity is on the creative side, otherwise they look like any other tech company.
— Chief Esparza (@ChiefEsparza) May 18, 2022
Y’all look over at Netflix: they are so committed to Diversify and Inclusion that at the thought of losing subs and profits all their diversity initiatives went first in times of layoffs. When honestly Strong Black Lead kept Black audiences watching in such a thoughtful way. pic.twitter.com/zDwYFf794B
— Ho Cake McMuffins (@ho_cake) May 18, 2022
Netflix did not immediately respond to Entrepreneur’s request for comment.
The streaming giant was down an astounding 62% year over year as of late Wednesday morning.entrepreneur • MAKE MONEY • side hustle