Netflix's stock has plummeted by 35% after the streaming service revealed a significant drop in subscribers and warned that millions more are expected to abandon the service in the near future.
A record decline in the company's stock price has shattered employees' confidence in the company's long-term trajectory.
Following the streaming service's first subscriber loss in more than a decade, Netflix's stock is plummeting steeply.
According to the company's latest earnings report, which was released on Tuesday, its customer base decreased by 200,000 subscribers during the period from January to March.
Netflix Declines; Will It Lose Its Employees?
As Netflix's stock price plummets to its lowest level in more than five years, the company faces the prospect of losing its most valuable resource: its employees.
Working at Netflix has long been considered to be one of the most coveted jobs in Hollywood. The company is regarded as one of the most beloved brands in the world, pays well, and provides the opportunity to collaborate with the individuals who transformed the way people watch television.
As a result of declining company performance, many employees' options have lost their significance. People who had tens or hundreds of thousands of dollars in their bank accounts are now left with nothing.
In the last week, current and former Netflix employees have stated that there are more people who want to leave the company than at any other time in recent memory. According to Bloomberg, Netflix employees have also requested that the company's leadership issue new stock grants to compensate them for the losses they have suffered over the past week.
As reported by CBS News, the decline in Netflix subscribers marks the first time this has happened since the service became available in most of the world outside of China six years ago.
Part of the reason for the decline this year can be attributed to Netflix's decision to suspend services from Russia in protest of the war against Ukraine, which resulted in a loss of 700,000 subscribers.
Netflix, on the other hand, acknowledged that its problems are widespread by projecting a further 2 million subscriber losses during the April-June period.
Netflix Changes
Netflix has been implementing significant changes to the platform and the company consistently. Netflix recently launched an increase in subscription prices. Before that, the company cracked down against the password sharing of numerous Netflix users.
The password sharing in Netflix accounts, estimates more than 100 million non-paying households watch the service this way.
As the market value of the company declines, it continues to reshape and implement changes. Just recently, it has also been reported that Netflix will now begin to accept ads at a lower price than before.
Netflix has employed a surmountable amount of employees for the past few years- from approximately 2,000 employees at the end of 2013 to more than 11,000 employees at the end of 2021. according to the company. The company is expected to slow down its recruitment as it enters a cost-cutting mode.
Netflix, with more than 220 million subscribers, continues to be the world's most popular streaming service. Despite the fact that the company had experienced uninterrupted quarterly growth in subscribers since October 2011.
Netflix also named two reasons for its drastic decline, first the company admitted it is losing customers to its competitors and second, it is also struggling to expand as a result of password sharing.
However, according to the BBC, Despite the difficulties, revenue increased by $7.8 billion in the first three months of the year.
