Netflix Plans to Cut Spending by $300 Million; No Layoffs Expected: Report
Netflix plans to cut its spending by $300 million (nearly Rs. 2,465 crore) this year, the Wall Street Journal reported on Friday, citing people familiar with the matter.
Company leaders urged staffers to be judicious with their spending, including in relation to hiring, but said there would be no hiring freeze or additional layoffs, according to the report.
Netflix declined to comment. Shares of the company were down nearly 2 percent in early trading.
Last month, Netflix beat estimates for first quarter but offered a lighter-than-expected forecast, demonstrating the challenges it faces in pursuit of growth.
The company said it shifted a wider launch of a plan to crack down on unsanctioned password sharing into the second quarter to make improvements.
As the streaming video pioneer faces signs of market saturation, it is exploring new ways to make money, such as password crackdown and a new ad-supported service.
Netflix in June also laid off 300 employees, or about 4 percent of its workforce, in the second round of job cuts aimed at lowering costs.
The company is also facing some trouble in India as the government here is seeking to tax the OTT platform for income earned from streaming services in the country, the Economic Times reported, citing people familiar with the matter.
In a draft order, income tax authorities attributed an income of about Rs. 550 million rupees to Netflix’s Indian permanent establishment (PE) in the assessment year 2021-22, the report added.
Tax officials reasoned that the US firm had some employees and infrastructure from the parent entity on secondment in India to support its streaming services, leading to a PE and tax liability, the publication reported.
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