Netflunks: Why is the world’s most popular streamer laying off 1,000 people?
Netflix is retrenching employees to free up money for new engines of growth.
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Netflix says it wants to become a trillion-dollar company and is expanding into advertising, video podcasts, creator content and games.
PHOTO: REUTERS
Douglas Montgomery
Netflix’s decision to cut roughly 1,000 jobs despite rising revenue and profits tells us something about the expectations facing today’s entertainment industry.
Netflix is an entertainment company, but it operates in a market that increasingly rewards scale, recurring revenue and continuous growth. Its main competitors have larger core businesses that help smooth out the rough patches. Amazon has retail and Amazon Web Services, Apple has its devices and services, and Disney has its parks to cushion downturns in entertainment. Netflix has no comparable safety net. It must find new sources of revenue and convince investors that its best growth years are still ahead.