According to a new report from The, Netflix plans to cut its spending by $300 million this year Wall Street Journal. The report points out that the streaming giant is looking to cut costs in part because it has delayed plans to crack down on password sharing in the US and elsewhere from the first quarter of the year to the second quarter, which means revenue is falling The move is now expected to happen in the second half of the year.
The company earlier this month urged its employees to be sensible about their spending, including on hiring, but noted there would be no hiring freeze or further layoffs.
A Netflix spokesman declined to comment.
It’s worth noting that while Netflix plans to cut costs by $300 million this year, that figure represents a small fraction of the company’s total spending. For example, Netflix’s operating expenses were about $26 billion last year.
The streaming giant topped estimates for first quarter of the year however, last month reported a worse-than-expected forecast. Netflix increased his estimate The amount of free cash flow the company plans to generate in 2023 is projected to grow from $3 billion to at least $3.5 billion.
Netflix has been exploring new ways to generate revenue. The company launched its crackdown on password sharing in Canada, New Zealand, Portugal and Spain earlier this year. In these countries, Netflix requires paying users to set a primary location for their account. When someone they don’t live with uses their account, Netflix advises them to “purchase an additional member.” Netflix allows up to two additional members per account for a fee that varies by country.
Additionally, the company introduced a new ad-supported plan called “Basic with Ads” last November. The tier costs $6.99 per month, which is $13 less than Netflix’s Premium plan, almost $9 less than the Standard plan, and $3 less than the Basic plan. This plan puts Netflix in competition with other major streaming services that offer ad-supported options, including Disney+, Hulu, HBO Max, Paramount+, and Peacock.
To cut costs, Netflix implemented a series of job cuts over the past year. In May 2022, the company laid off around 150 employees. A month later, the company laid off 300 more employees, about 3% of its workforce at the time. Netflix then fired another 30 animation staff in September.
Netflix’s crackdown on password sharing is expected to arrive in the US on or before June 30.