Netflix Said to Cut More Than 15 Jobs After Subscriber Loss, Growth Curbs
Netflix Inc. (NFLX), the mail-order and online video service, eliminated more than 15 jobs after losing 800,000 U.S. subscribers in the third quarter, according to two people with knowledge of the decision.
The cuts, which began before earnings were announced on Oct. 24, are mostly in human resources, where Netflix had hired in anticipation of faster growth and the creation of separate companies for its mail-order and streaming businesses, said the people, who weren’t authorized to speak publicly.
Netflix, based in Los Gatos, California, has put its global expansion on hold while it tries to contain a subscriber revolt over a price increase and the aborted plan to split the two operations. The shares fell 35 percent yesterday after the company disclosed the defections and predicted losses next year.
Netflix gained 2.6 percent to $79.40 at the close in New York. The shares have retreated more than 70 percent from their all-time high set in July.
Chief Executive Officer Reed Hastings met personally with staffers who were being cut to explain the decision, according to one of the people.
Steve Swasey, a Netflix spokesman, declined to comment on the job cuts. He said last week the company had eliminated the position of chief marketing officer for the planned DVD service. Netflix finished 2010 with 2,180 employees, according to data compiled by Bloomberg.
Moody’s Investors Service today lowered its rating outlook on $200 million of Netflix debt to stable from positive, citing the subscriber loss and the company’s forecast for negative cash flow for upcoming quarters.
The company said on Oct. 24 it would hold off on further international expansion after introducing service in Great Britain and Ireland in early 2012 and in Latin America this year. On Oct. 10, the company abandoned plans to create a new DVD service called Qwikster.
To contact the editor responsible for this story: Anthony Palazzo at firstname.lastname@example.org