Growth No More? Netflix Tightens Belt with $300M Spending Cut Amid Streaming War

Netflix, Inc NFLX prepares to slash its spending by $300 million in 2023 to improve profitability in a highly competitive market. 

The pushback in Netflix's plans to crack down on password sharing from the first quarter to the second quarter partly led to the move, the Wall Street Journal reports.

In an internal meeting in May, Netflix's leaders urged staffers to be prudent with their spending, including hiring.

Netflix incurred about $26 billion in operating expenses for FY22.

Across the streaming industry, companies have intensified their focus on profitability after chasing subscription growth for several years. Netflix emerged as the only profitable streaming business, unlike its peers.

The postponement of the password-sharing crackdown will lead to the recognition of incremental revenue in the year's second half.

In April, Netflix boosted its free cash flow guidance while sharing its first-quarter results.

Netflix began scrutinizing costs after it reported its first subscriber loss in a decade about a year ago, leading to a stock price decline.

Netflix eyed layoffs, paring its real-estate footprint, changes in salary ranges for specific roles, and new approaches to paying for programming to contain costs.

Price Action: NFLX shares traded lower by 2.13% at $337.42 on the last check Friday.

Photo by Vicky Gharat via Pixabay