Netflix is seemingly in a lot more trouble than initially thought. During their investor’s meeting back in the spring, it had been revealed that the streaming giant had lost more than 200,000 subscribers. This was on top of the 750,000 lost when service in Russia had been stopped completely. This massive loss in subscribers led to a host of issues. Investors began a class-action lawsuit against the company, stating that information was withheld about the loss of income due to the drop in subscribers. This has led to a plummet in the company’s stock prices. Now, it appears as if Netflix plans for more layoffs due to these ongoing problems.
Back in May, around 150 employees, dozens of contractors, and part-time workers lost their jobs. These layoffs led to a lot of scaling back in the programming for Netflix. We saw a ton of shows be canceled and one of the biggest hits was the animation department. Apparently, the streaming platform is set to lay off even more employees by the end of this week, though it is said to be a much smaller number than the original 150. The company is facing significant losses since it announced the drop in subscribers. The value of the company has plummeted by nearly 70%. Investors began to sell off their stock of the company in droves. Where once a share of the company was valued at over $600 in January, it is now worth around $175 a share.
Netflix was once the premiere streaming platform, but there has been a myriad of issues from subscribers that have led others to abscond to something more affordable. The prices of a monthly subscription have risen exponentially in the past few years. The price of a standard subscription in 2019 was $12.99 per month. Now that number has jumped to $15.49. For comparison purposes: Amazon Prime Video is $8.99 a month, Disney+ is $7.99 a month, AppleTV+ is $4.99 a month, and Hulu is $6.99 a month with ads. For the price of Netflix, you could have Amazon Prime and Disney+, or AppleTV+, etc. The point is that there are other cheaper streaming services that people are flocking to resulting in the drop in subscribers and Netflix layoffs.
Should more layoffs happen at Netflix, it might lead to the company dropping down to the lowest value it has been since it first started. One thing the streaming giant could or would think about doing is lowering their prices to get people to return. This is a classic case of a company upping its product prices to mask the fact that they are losing income. At least, that is what it looks like to us.
It is sad that the Netflix layoffs are affecting employees that likely had nothing to do with the price increase and alleged information withholding. Hopefully, the streaming platform can figure something out and right its wrongs fast, so that more employees are forced to pack their things and go. We will see what happens in the coming weeks.