Netflix Goes Through A Massive Layoff And Considers Launching An Ad-Supported Tier

  • In the second round of layoffs, Netflix lets go of 300 employees.
  • Also, launch an ad-supported, less expensive membership tier in the final three months of the year, earlier than anticipated.
  • 20 lakh paying Netflix members reportedly left the service in Q2.

After reporting a loss of 2 lakh paying customers in the first quarter of 2022, Netflix’s first subscriber loss in more than ten years, which caused its stock to drop by 20%, Netflix has now opted to reevaluate some of its choices. In response, the business has undertaken a fresh round of layoffs and intends to launch an advertisement-supported tier for its streaming service.

Following a decline in subscribers, Netflix said on Thursday that it has fired 300 workers in the second round of employment layoffs. This has mostly impacted US workers and represented 4% of the streaming giant’s staff. These recent layoffs occurred only a few weeks after the streaming service, which employs over 11,000 people worldwide, announced the first round of similar-sized reductions in May when it’d fired 150 employees as well as several contractors and part-timers. Sebastian Gibbs and Negin Salmasi, among other outstanding creatives from its initial series vertical, were also asked to leave.

In another effort to keep the business viable, Ted Sarandos, co-CEO of Netflix, said in an interview at the Cannes Lions advertising festival that the company will add an ad-supported tier to its streaming service.

“We are adding an ad tier. We’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads,'” Sarandos told ‘Sway’ podcast host Kara Swisher. He also declared that possible partners for the streaming service’s ad sales are in discussions with the company. It is still to be seen whether a new advertising tier will prove to be the answer to Netflix’s growth issues. According to rising rumors, the service might be the subject of a takeover.

The matter at hand is which ad-sales company Netflix will collaborate with in order to support its entry into the advertising industry. The Wall Street Journal reported earlier this month that Google and NBCUniversal were two of the leading candidates. When questioned about potential partners during the Cannes interview, Sarandos declined to comment, but he did imply that Netflix may utilize a partnership as a temporary solution while it develops its own ad business.

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