The bad Netflix news keeps coming. The company is being sued for allegedly misleading shareholders on subscriber growth. According to the complaint, Netflix gave “misleading statements” and “failed to disclose” that subscriptions were declining due to “among other things, account sharing by customers and increased competition from other streaming services.” Investors who owned shares between October 2021 and April 2022 are seeking “monetary damages” after the streamer reported losing 200,000 subs during the first quarter of 2022, its first subscriber losses in a decade. After the earnings call, Netflix’s stock price dropped more than 35 percent, leading to a $50 billion decline in value.
Behind the scenes, Netflix has been announcing major changes and cost-cutting measures. In order to regain that subscriber growth, the streamer is reportedly cracking down on “password sharing” in order to increase the number of households paying to watch. It is also going through a massive reconstruction of its children’s animation department, firing department executive Phil Rynda, among others on staff, and canceling several animated series in development. Most recently, Netflix laid off at least ten employees from its editorial site Tudum, a “fan website” focused on their projects.