English
Bahasa Indonesia
As a company that provides an online streaming platform. Netflix is known as one of the most successful media in the world with its relentless innovation. This Californian company, which was founded in 1997, made many achievements and managed to dominate the film and television industry. Unfortunately, entering 2022 Netflix began to face various problems, one of which was the mass layoff of 150 employees.
Quoted from CNBC, Netflix representatives reported that their company let go of as many as 150 employees based in the United States as a result of the financial problems they were facing.
The layoffs come less than a month after Netflix experienced a decline in subscribers of 200,000 in early 2022. This is the biggest decline Netflix has ever faced in the last decade.
The decline, of course, had a very large loss impact, including the decline in shares which reached 70 percent in January 2022.
This situation is in stark contrast to the third quarter of 2021, where Netflix achieved success by capturing 213.56 million subscribers worldwide with revenues of 234 US dollars. This makes Netflix the richest media company, beating Walt Disney during the pandemic.
Read also: The Wave of Employee Turnover After Eid on Your Tech Team
Netflix Isn’t The Only Company Making Mass Layoffs
Mass layoffs are actually not a rare phenomenon in 2022. This is a new challenge for many technology companies in the United States. Even several other large companies such as Amazon, Facebook Meta, Uber, and Robinhood have also announced the same thing, namely a freeze on employee recruitment.
Based on research conducted by the Observer, there are around 54 technology startups that have laid off thousands of employees entering 2022. This number is greater than the layoffs of employees last year.
The observer said there were many reasons behind this happening, partly due to rising labor costs, inflation, slowing business and lack of funds in the private and public markets.
This wave of layoffs strikes many technology companies, both small and large. Almost all companies were affected.
Read also: How Workplace Diversity and Inclusivity Matters
Is Decreasing Subscribers the Only Cause of Mass Layoffs?
Netflix’s mass layoff leaves a number of questions. How could a big tech company that ruled the online streaming industry start to decline?
If indeed losing subscribers is the only reason, then mass layoffs don’t need to be done if the company has qualified employee management.
Netflix is known to be a very bold place, they have a very high standards work culture. They don’t even hesitate to provide ten times greater benefits to employees who have the best performance.
Netflix has also always emphasized that they are a team not a family. This means, from the many employees at this giant streaming company, all of them must be very pro members by providing maximum performance. Otherwise, Netflix will let its employees leave.
Netflix is also moving very ambitiously. They approach customers by spending a lot of money to offer a larger compensation package than their competitors. Not only that, Netflix also spends a lot of money on content and filmmaking.
In the past few years the strategy and work culture built by Netflix has been successful. They got a lot of achievements, the peak of which was last year’s pandemic. Netflix experienced a significant growth of 20%.
But unfortunately it did not last long. As previously explained, in 2022 Netflix experienced a decrease in subscribers which prompted them to lay off many employees.
Read also: Female Programmer: Breaking Gender Stereotypes In Tech
Over Hiring and Lack of Employee Management
Netflix has various ambitious projects, one of which is launching Tudum. A fan-only site launched last December to share content related to their show. Through this site, users can always update exclusive information about the movies, series, or variety shows they like.
To make this happen, Netflix previously recruited many editors and writers to join their team. But unfortunately, of the 150 employees who were laid off, some of them were members of the Tudum team.
There are about 10-12 laid off writers and editors on this team. They are very talented journalists and have worked in major US media such as Vice, Teen Vogue, The New York Times, and others. In fact, some of those who were dismissed were only recruited by Netflix a few months ago.
According to an NPR report, one of the former members of Tudum who was hit by the mass layoff revealed that previously Netflix approached them in a fairly aggressive manner. All team members are promised great benefits including editorial independence and higher salary offers with secure positions.
In this case, we can see, Netflix has big ambitions to become an online streaming platform that outperforms its competitors through various innovative projects and invites many top talents to join them.
However, it seems that things did not go smoothly and led to over-hiring. Instead of being able to create a reliable team by recruiting many top-class editors and journalists, it actually makes it unstable because of the large number of team members it has. In the end, they had to cut some employees when profits dropped due to the loss of hundreds of thousands of customers.
According to the Protocol.com article, after the decline in subscribers in the last decade, Netflix also seems aware of not wasting company funds on recruitment and spending excessively. One Netflix executive reportedly reminded his team of this.