Netflix is reigning in its spending in a sign that the company is grappling with slow subscriber growth. The Information reported on Friday that the company's executives recently warned employees to be mindful of spending and hiring.
The warnings first were made at Netflix management offsite event in Anaheim, Calif. last month, then discussed again at an employee town hall on Monday, three sources familiar with the talks told The Information. Netflix's headcount exploded by 59% over the past three years, ending 2021 with around 11,300 people, and the streamer invested heavily in its own content.
The warnings are a signal that Netflix is thinking more about its slowing subscriber growth. In years prior, the company saw double-digit subscriber growth for several quarters. But in the fourth quarter of 2021, Netflix's subscriber base grew just 8.9%, compared to close to 22% in the same period in 2020. The company reigned in its growth expectations for the first quarter to an 8% bump in subscribers, or 2.5 million people globally.
Netflix did not respond immediately to request for comment from Protocol. The company's stock declined slightly in after hours trading following the release of The Information's report.
As the company combats slowing growth, it has also raised its prices in the U.S. and Canada by $1 to $2 per month and has started cracking down on rampant password sharing by testing out an additional fee for extra users in Chile, Costa Rica and Peru.
Though Netflix still ranks as the top streaming service globally with close to 222 million users, rivals are quickly gaining on it: Disney+ has a total subscriber base of close to 130 million after launching in November of 2019, and HBO has a total of close to 74 million between its streaming service HBO Max and its cable channel.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE