According to a report by the Wall Street Journal on Friday, Netflix Inc is planning to reduce its spending by $300 million this year. The information comes from sources familiar with the matter, who revealed that company executives have urged employees to exercise caution when it comes to spending, particularly in terms of hiring. However, the report clarifies that there will be no hiring freeze or additional layoffs at this time.
Netflix has chosen not to comment on the matter. As a result of this news, the company’s shares experienced a decline of nearly 2% during early trading.
Although Netflix surpassed expectations in the first quarter, it provided a forecast that was lighter than anticipated, highlighting the challenges it faces in its ongoing pursuit of growth.
One of the initiatives that Netflix had planned was a crackdown on unsanctioned password sharing. However, the company decided to delay the wider launch of this plan until the second quarter to make improvements.
As the streaming video giant confronts signs of market saturation, it is exploring new avenues to generate revenue. This includes implementing measures to tackle password sharing and introducing a new ad-supported service.
Earlier in June, Netflix had already conducted a round of job cuts, resulting in the termination of 300 employees, which represented approximately 4% of its workforce. This move was part of the company’s efforts to reduce costs.
The decision to trim spending by $300 million indicates Netflix’s commitment to financial discipline as it navigates a highly competitive industry and seeks to strike a balance between maintaining profitability and sustaining its position as a leader in the streaming market.
