Netflix will be laying off 300 workers from its staff, which The Wall Street Journal reports to be about 3% of the streaming service’s workforce.

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Why the cuts? This move was made to cut costs, after the company reportedly lost 200,000 subscribers in the first quarter of the year. Netflix had expected to gain 2.7 million users during that time, according to Forbes. This probably won’t be the last round of cuts, the company said.

  • “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth,” a Netflix spokesperson said, via Bloomberg.
  • This is the second consecutive month that the company has had a round of layoffs, NPR reported. In May, the streaming service laid off 150 employees due to slowing revenue.
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Ad-based subscription plan: To make these accommodations, Netflix plans to offer a new subscription plan, where users can watch ads in exchange for a cheaper subscription, according to The Wall Street Journal.

  • “Netflix has ‘left a big customer segment off the table,’” said co-CEO of Netflix, Ted Sarandos, according to Forbes. The company will be adding a segment for “folks who say, ‘Hey, I want a lower price and I’ll watch ads.’”
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Why is Netflix losing subscribers? When Netflix’s streaming service started to take off, other companies noticed and began following in its footsteps.

  • Not only are these companies a competition for screen time and profit, they are also a competition for content, Vox says.
  • Since the explosion of Netflix, movies and TV shows like “The Office” and all Disney products have moved to their own streaming services. Naturally, fans have followed these shows to the other services.
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