After a large subscriber loss, Netflix instructs its staff to spend company funds 'wisely'
By: April Carson
Netflix is telling its employees to be financially responsible while facing a subscriber decline that has generated concerns over the long-term viability of streaming services.
On Thursday, Netflix released an updated culture memo, which included the employee directive. In the “Judgment” section of the letter, Netflix instructs employees to “spend our members' money responsibly," wording that the firm has employed in a 2018 shareholder letter but has not previously formalized for workers.
This is a significant departure from the rest of the document, which also instructs employees to "avoid regulations."
Netflix's subscriber losses were so significant that they prompted the company to announce its first net loss in a decade. Netflix said it lost 200,000 subscribers due to account sharing, the epidemic, and increased rivalry from rivals. Still, even though competition is still strong in years since, investors and rivals are worried whether all streaming services will experience a similar decline.
In response to these subscriber losses, Netflix has now instructed its staff to "act wisely" when it comes to spending company funds. This is likely in an attempt to cut costs and prevent further losses. However, it remains to be seen if this will be enough to save Netflix from future declines.
Rivals such as Amazon and Hulu have been quick to take advantage of Netflix's recent subscriber losses. Both companies have been pouring money into their own streaming services, in an attempt to lure customers away from Netflix. It is clear that the streaming wars are only getting more intense, and it remains to be seen who will come out on top.
In light of the lower than anticipated subscriber counts, Netflix announced it will look into offering an ad-supported portion of its streaming service. Analysts had said that the January price boost to Netflix's monthly subscription fee in the United States and Canada was a contributing factor in the loss of subscribers. The streaming firm has also mentioned cost-cutting initiatives.
“We’re pulling back on some of our spend growth across both content and non-content spend,” CFO Spencer Neumann said during the first-quarter earnings call. We're trying to be smart about it and cautious in reducing expenditures to match the business's revenue gains.
With the company's stock price depressed and executives warning of potential cost reductions, employees at Netflix are worried. They've witnessed a decline in employment and anticipate future firings as a result of the slowdown, as well as executives' statements about "cutting back" on expenses.
To summarize, Netflix has always backed the motto "Keep only our highly effective individuals," as it reiterated again in Thursday's updated letter. Variety initially reported the information of the memo.
Netflix is preparing its workforce for more stringent cost-cutting measures in the wake of a disappointing earnings report that saw the company lose U.S. subscribers for the first time in eight years.
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About the Blogger:
April Carson is the daughter of Billy Carson. She received her bachelor's degree in Social Sciences from Jacksonville University, where she was also on the Women's Basketball team. She now has a successful clothing company that specializes in organic baby clothes and other items. Take a look at their most popular fall fashions on bossbabymav.com
To read more of April's blogs, check out her website! She publishes new blogs on a daily basis, including the most helpful mommy advice and baby care tips! Follow on IG @bossbabymav
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