Netflix to Lay Off Employees as It Shifts Marketing Strategy (Exclusive)

Netflix sign  - H 2015
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Sources say at least 15 people are expected to exit this week as the company moves to better advertise the service rather than its individual shows.

Netflix is overhauling its marketing strategy and laying off some employees in the process.

Sources say the streaming giant, which has emphasized marketing individual shows and movies in recent years, will work to better sell the service as a whole. Though specifics about the strategy are being worked out, an ad campaign built around a big premiere film like Sandra Bullock’s Bird Box or an Emmy-winning series like The Crown might be coupled with a general pitch for Netflix as the home for thousands of premium movies and awards-caliber shows.

Hollywood stars and creators, who have flocked to Netflix in recent years, may be concerned that by amplifying its brand advertising, Netflix might promote the work of its A-list talent less. Creatives have lamented getting lost in Netflix's glut of content, though few in business with the streamer talk about it publicly. 

But sources within Netflix dispute that the platform's desire to market the service as a whole necessarily means less project-specific marketing — rather that there will simply be more of a focus on making sure those titles reflect and clearly tie into the larger company brand. Netflix declined to comment.

As part of the shift, a Netflix source says 15 people are expected to be laid off from the company's marketing department this week, though others say that number could be even higher. The layoffs represent a small portion of Netflix's overall employee count, which as of October was around 6,900 people.

Insiders say the changes are coming from the company's new chief marketing officer, Jackie Lee-Joe, who was hired from BBC Studios in July following former chief marketing officer Kelly Bennett's retirement. Lee-Joe is said to have felt that Netflix over-hired in the marketing department and is looking to structure the team in a more effective way. According to the company's latest 10-K filing with the SEC, Netflix spent more than $1.8 billion on advertising in 2018.

The news comes on the heels of Netflix's recent quarterly earnings report, in which it revealed that though its global subscriber base grew 20 percent to 167 million members, its growth in the U.S. has slowed. During the fourth quarter of 2019, the platform added just 550,000 paid subscribers in the U.S. and Canada, regions where it has the most market saturation.

Employee churn isn't uncommon at Netflix, which is known for an unconventional review process that can lead to frequent performance-related cuts. However, this new round of reductions arrives as the streamer faces increased competition from rival companies such as Disney, WarnerMedia and NBCUniversal entering the streaming video business.

For years, the high-flying company has spent money with abandon, paying much higher up-front fees than its Hollywood peers and increasing its content budget to $15 billion as its international programming output ballooned, but Netflix recently has been looking to rein in how much cash it is burning.

Natalie Jarvey contributed to this report.