Netflix confirmed it’s laid off approximately 150 primarily U.S.-based staffers as it works to rein in costs as its top-line growth has slowed down.
A Netflix representative wrote in an emailed statement, “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 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.”
Deadline had reported that some of those let go were in creative, including in original content. Reportedly, directors from the original series area, such as Sebastian Gibbs and Negin Salmasi, were among those let go, its report said.
Separately, TechCrunch learned that there have been some changes to animated projects, which could impact around 70 employees in the animation division. These were not included in the 150 figure.
We asked Netflix about the allegations shared on Twitter that the layoffs had targeted social channels designed to bring marginalized viewers to the service. One such tweet had named channels like Strong Black Lead, Golden, Most, and Con Todo as being impacted by this headcount reduction.
Netflix clarified that none of its social channels — including those mentioned on Twitter and others (eg. Geeked, Netflix Family, Netflix is a Joke, etc.) — would be shut down. The company said those channels would continue to be staffed and run by full-time Netflix employees as they had before.
What did happen, however, is that Netflix decided not to renew contracts with select agencies that it previously used to source contractors for its publishing and social arms. With those deals terminated, there was a reduction in the number of contractors working across all Netflix’s social channels. These contractors are not included in Netflix’s count of 150 roles terminated as that figure is specifically related to Netflix’s employee numbers. As such, the layoffs have not changed Netflix’s makeup from a DEI perspective, as its reporting here looks at full-time staff. The company says people of color continue to make up about 50% of its U.S. and Canadian full-time workforce and women make up around 48% of staff.
The company declined to say how many contractors were impacted by the agency contract terminations.
After publication, the Netflix Twitter account announced that none of the social channels were closing and would continue with “voices celebrating — and from — those communities.”
In a statement, a Netflix spokesperson said “We are making changes to how we support our publishing efforts, including bringing some of this important work in-house. Our social channels continue to grow and innovate, and we are investing heavily in them.”
The agency contract terminations had also impacted Netflix’s recent marketing layoffs when 25 full-time employees people were let go. Netflix’s newer site Tudum had been impacted by the marketing cuts, as were other marketing roles. (This round of layoffs had also included a mix of full-time employees and contractors, but 25 was the number of full-time employees impacted.)
Staff reductions had been expected, as the company said in its quarterly letter to shareholders, “Our revenue growth has slowed considerably as our results and forecast below show.”
Netflix reported revenue of $7.87 billion for the first quarter of 2022 and a significant loss of 200,000 subscribers. Analysts had predicted $7.93 billion and 2.7 million subscribers. A belt-tightening was on the horizon as soon as those quarterly figures hit.
Cost-cutting measures were also addressed by Netflix CFO Spencer Neumann during the latest earnings call.
He said, “ … presumably, for the next 18, 24 months, call it the next two 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 non-content spend, but still growing our spend and still investing aggressively into that long-term opportunity.”
Neumann added, “We’re trying to be smart about it and prudent in terms of pulling back on some of that spending growth to reflect the realities of the revenue growth of the business.”
Updated 5/17/22 at 6:05 p.m. Updated list of names impacted to remove Brooke Kessler, which had been cited by another outlet; 5/18/22, 9:10 AM ET with additional insight into the layoffs metrics; and again at 5/18/22, 7:29 PM ET with Netflix tweet, statement, and further clarification around animation dept.