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Netflix’s revelation that it misplaced 200,000 subscribers within the first quarter put additional stress on an already beleaguered tech sector, however high tech analyst Mark Mahaney believes the present weak spot within the sector presents a number of alternatives for traders.
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Netflix is shedding round 300 extra workers throughout the corporate.
The cuts, which signify about 3% of complete workers, come a couple of month after the streaming firm eradicated about 150 positions within the wake of its first subscriber loss in a decade.
“In the present day we sadly let go of round 300 workers,” Netflix mentioned in an announcement Thursday. “Whereas we proceed to speculate considerably within the enterprise, we made these changes in order that our prices are rising in keeping with our slower income progress. We’re so grateful for all the things they’ve achieved for Netflix and are working laborious to help them by this tough transition.”
Netflix had warned traders in April that it might be pulling again on a few of its spending progress over the subsequent two years.
Spencer Neumann, the corporate’s chief monetary officer, mentioned throughout the firm’s earnings name that Netflix is making an attempt to be “prudent” about pulling again to to mirror the realities of its enterprise. The corporate nonetheless plans to speculate closely, together with round $17 billion on content material.
Co-CEO Reed Hastings additionally mentioned throughout the name that the corporate is exploring lower-priced, ad-supported tiers in a bid to herald new subscribers after years of resisting commercials on the platform.
Netflix is working to crack down on rampant password sharing as effectively. The corporate mentioned that along with its 222 million paying households, greater than 100 million households use its service by account sharing.
Shares of the corporate have been down lower than a % throughout noon buying and selling Thursday, however are down extra round 70% since January.
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