Netflix's 'Rightsizing' Of Office Footprint Results In $80M Loss

After another tough quarter in which Netflix reported a loss of 970,000 subscribers, the company announced an $80M write-down connected to its exit of some real estate leases.

“We’ve adjusted our cost structure for our current rate of revenue growth,” a letter from Netflix to its shareholders read. Doing so meant incurring “an $80m non-cash impairment of certain real estate leases primarily related to rightsizing our office footprint,” the letter said.

The company also incurred $70M in severance costs. The company has laid off hundreds of workers since June. The Real Deal first reported the write-downs.

It’s not clear which leases the letter referred to, but Netflix did list 180K SF of office space in Burbank for sublease earlier this month.

It's been a rough year for the streaming giant as subscribers leave the service and its attempts at making its own content land unevenly with viewers.

“Our excitement is tempered by the less-bad results,” co-CEO Reed Hastings said in Netflix’s earnings call. “But looking forward, streaming is working everywhere. Everyone is pouring in.”

Despite an optimistic outlook, the company made some big changes in the last three months to correct for some worrying financial news earlier this year.

In the company’s Q2 earnings interview, Netflix Chief Financial Officer Spencer Neumann said the company doesn’t expect to face any other restructuring costs this year.

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