There has been a spate of layoffs in 2022, especially at companies that witnessed splendid growth at the height of the COVID-19 pandemic. Netflix has announced a new round of layoffs, which would also impact contractors working on the Tudum website. What is Tudum and why is Netflix laying off contractors?
There has been a terrible sell-off in stay-at-home winners. Names like Netflix, Zoom Video Communications, Peloton, Teladoc Health, and DocuSign trade at a fraction of their recent highs. In some cases, company-specific factors have also played a part. For example, Peloton is still battling the fallout from the fatal accident involving its equipment.
Several tech companies are witnessing a growth slowdown.
Several tech companies are witnessing a growth slowdown. As a result, many of these companies find themselves overstaffed and have had to announce layoffs to rightsize their workforce.
Netflix lost 200,000 subscribers in the first quarter of 2022. While its exit from the Russian market was blamed for the first fall in subscriber numbers in a decade, it also lost subscribers in the lucrative North American market. The company also forecast that it would lose another 2 million subscribers in the second quarter of 2022.
What is Tudum?
According to Netflix, Tudum “is the official companion site to Netflix, helping find and fuel your fandom for the TV shows and movies you love.” The website features behind-the-scenes content, exclusive interviews, and bonus videos. The website is only available in English and an adult profile is needed to view the content, which Netflix says can have “stories about titles above your profile’s maturity rating setting.”
Netflix launched Tudum in December 2021.
Netflix launched Tudum in December 2021. However, the company didn't manage to market the website the way it might have intended. Many Netflix subscribers didn't know about Tudum before the news of layoffs at the website cropped up.
This isn't the first time that Netflix has laid off contractors at Tudum. Recently, Netflix laid off some editors at the website.
Netflix blamed the slowdown for the layoffs.
Netflix spokesperson Erika Masonhall told The Verge, “As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S.-based.”
Masonhall added, “These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues. We’re working hard to support them through this very difficult transition. A number of agency contractors have also been impacted by the news announced this morning. We are grateful for their contributions to Netflix.”
The contractors that have been laid off at Tudum were informed of the decision through a mass email sent by the contracting company.
Netflix is working to lower costs and revive growth.
Competition has heated up in the streaming industry and Netflix, which for the last many quarters had maintained that it doesn't see much competitive pressure, has finally admitted to the intensifying competition.
Now, the company is looking at an ad-supported version that can help lower the prices for subscribers. The company is also looking at ways to tackle the menace of password sharing. Netflix said during the earnings call for the first quarter of 2022 that around 100 million people watch its content through shared passwords.
At the same time, Netflix is looking to lower costs. Streaming companies have had to increase the outlay towards content production to retain and attract new subscribers. With growth slowing, Netflix faces the tough balancing act between supporting growth and managing profit margins.