Netflix’s revelation that it lost 200,000 subscribers in the first quarter puts further pressure on the already scorned tech sector, but top tech analyst Mark Mahaney believes the industry’s current weakness This sector offers a number of opportunities for investors.
Aaronp / bauer-griffin | Gc Images | beautiful pictures
Netflix is laying off about 300 more employees across the company.
The cuts, which account for about 3% of the company’s employee base, come about a month after going live the company eliminated about 150 positions after the first subscriber loss in a decade.
Netflix said in a statement on Thursday: “Today, we sadly let go of about 300 employees. “While we continue to invest significantly in the business, we’ve made these adjustments so that our costs are growing in line with our slower revenue growth. We’re grateful for all they’ve done for Netflix and are working to support them through this difficult transition.”
Netflix warned investors in April that it would reduce some of its spending growth over the next two years.
Spence Neumann, the company’s chief financial officer, said during the company’s earnings press conference that Netflix is trying to be “cautious” in going back to reflect the realities of its business. The company still plans to invest heavily, including about $17 billion in content.
Co-CEO Reed Hastings also said on the call that the company explore lower price tiers, ad supported in an attempt to bring in new subscribers after years of fending off ads on the platform.
Netflix is also working to prevent rampant password sharing. The company said that in addition to the 222 million paying households, more than 100 million households use its service through account sharing.
The company’s shares fell less than one percent in midday trading on Thursday, but are down more than about 70 percent since January.