Netflix’s move to solidify its top spot in the instant streaming game may have cost a handful of its DVD business’ employees their jobs this month.
An anonymous tipster informed the Hacking Netflix blog that due to a falling demand for by-mail movie rentals, Netflix axed half the workforce at a major Ohio shipping facility. The company’s Grove City Central Operations Center was performing well under its operational capacity of 1 million DVD shipments per week, said the source.
Originally touted by the company as the only midwest shipping center it needed, the Grove City center is now a fading star. The 90,000-square foot factory opened in 2009 and employed around 120 people. Movies from the center’s 5 million disc stockpile were shipped to smaller regional facilities to fulfill local customers’ queues.
The job cuts can be traced back to several high-profile Netflix blunders during 2011, including an unpopular price hike and the failed launch of a new DVD by-mail branch called Qwikster. The former is often cited as the main reason an estimated 1 million people canceled their subscription plans in the year’s closing months.
In November, word spread that Netflix had laid off 90 customer service reps in Oregon thanks to a perfect storm of the abandoned Qwikster launch and noticeable subscriber losses. Weeks earlier, the company cut 15 human resources jobs.
Netflix’s recent debuts in Latin America and Europe don’t include DVD rental options, leading many U.S. DVD by-mail customers to question how much longer the option will be available for them. The company launched its streaming service in the UK and Ireland last week, though further expansion seems unlikely for now. (via Hacking Netflix)