Netflix revealed that it took $70 million for termination costs in the second quarter, as the company adjusts its operating model for slower growth in the top line.
Netflix had several rounds of layoffs in the second quarter. On June 23, the company said it had laid off 300 employees, as it first reported diverse. It came after it left about 150 employees in May, and in April it laid off about 25 employees in its marketing group, including many of Tudum’s fan-focused content team.
The company announced the restructuring fee as part of announcing its second-quarter 2022 results on Tuesday. Netflix’s subscriber losses came in less than expected, as the streaming device lost 970,000 net customers in the period compared to its previous guidance with a loss of 2 million.
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“We have adjusted our cost structure to the current rate of revenue growth,” the company said in its letter to shareholders.
In addition to $70 million in termination costs, Netflix received $80 million in non-cash impairment charges “for certain real estate leases primarily related to the upgrade of our office space.”
Excluding those items totaling $150 million and the foreign currency impact of a stronger US dollar in the quarter, operating profit and operating margin were “slightly above our indicative expectations,” the company said.
In the US and Canada, Netflix revenue and average member per member (ARM) increased 10% year over year, excluding the impact of foreign exchange. The company lost 1.3 million subscribers in the UCAN region, but Netflix said retention improved over the quarter, and “while turbulence remains slightly elevated, it is now back near previous price change levels.”
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