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Netflix is advising its employees to be fiscally responsible, while facing a loss of subscribers that has sparked fears about the viability of streaming services.
The employee directive comes in an updated culture memo by the company Thursday. Under the “Judgment” section of the memo, Netflix tells employees to “spend our members’ money wisely” — phrasing that the company used in a 2018 letter to shareholders but has not formalized for staff until now.
This is a marked change from the rest of the largely freewheeling document, which also tells employees to “avoid rules.”
It comes after Netflix reported its first loss of subscribers in a decade. Netflix attributed the 200,000 subscriber loss to account sharing, the pandemic and increased competition from rivals. Still, the loss at the streaming giant has spooked competitors and investors, who are now questioning whether all streaming services will see a similar slowdown.
In light of the weaker-than-expected subscriber numbers, Netflix said it will explore launching an ad-supported section of the streaming service. Analysts had pointed to the January increase in Netflix’s monthly subscription price for new members in the U.S. and Canada as another reason for the loss of subscribers. The streaming company has also spoken of other cost-cutting measures.
“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 prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business.”
The slowdown, as well as executives’ talks of “cutting back” on costs, has caused worry among employees at Netflix, who have seen a slowdown in hiring and fear future layoffs.
To end, Netflix has always stuck by the motto, ”Keep only our highly effective people,” which it reiterated again in Thursday’s updated memo. Variety first reported the details of the memo.
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