Netflix has reportedly planned for a massive budget cut before the end of 2023.
According to The Wall Street Journal, Netflix Inc. is reportedly planning to cut spending by $300 million in 2023. While the report stated that higher-ups at the company have advised employees to watch their spending, which includes hiring, these budget cuts will not include a hiring freeze or layoffs. Netflix has neither officially confirmed this report nor publicly commented on the matter.
In June 2022, Netflix laid off 300 employees, which equates to 4% of its workforce, in an effort to lower costs. More recently, the streaming service announced in April that its new paid sharing plan would hit the United States in the second quarter of 2023, so likely by the summer. As part of Netflix’s effort to crack down on password sharing, subscribers will now have to pay extra to share their accounts with multiple people. Initial tests of the new “paid sharing” plan began in South America in 2022. It was later implemented in countries like Canada, New Zealand, Spain, and Portugal in February.
Netflix Cracks Down on Password Sharing
While Netflix users initially opposed the new plan, the streaming giant has reported that paid subscriptions in Canada have actually increased since paid sharing was launched. “I think there’s a range of motivations for different borrowers,” said Netflix co-CEO Greg Peters in a previous announcement. “So some of it is economically driven and so a part of what we’re trying to do is that we are being responsive to that and finding the right price points, whether in terms of an individual account or an extra member affordance.” Peters added that the new rules against password sharing will give some users “a nudge” to create their own account.
These changes at Netflix come after a less-than-stellar 2022 for the streamer. Netflix reported in April of that year that it had lost 200 thousand subscribers despite the company’s predictions that it would gain 2.5 million, citing reasons for the decrease as password sharing and rival streaming services, among others. Around that time, it was reported that Netflix was no longer the biggest streaming company in the world, with Disney surpassing it with 221 million direct-to-consumer subscribers across Disney+, Hulu and ESPN+.
Netflix has a packed slate of releases for the rest of 2023, including anticipated films such as Extraction 2 starring Chris Hemsworth, Heart of Stone starring Gal Gadot, Zack Snyder’s upcoming sci-fi epic Rebel Moon, and Damsel starring Millie Bobby Brown. Additionally, Netflix recently released its first Bridgerton prequel spinoff, Queen Charlotte.
Source: The Wall Street Journal
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