The demand for Netflix‘ red envelope DVDs has dropped dramatically, compared to that of 2011, which is why the company is now closing a call center in Hillsboro, Oregon.
The Netflix call center focused on servicing its DVD subscription business, now they will let go the 188 employees that remained. The Hillsboro facility opened in 2006 and quickly staffed up to around 300.
Employees say it once had several hundred employees, and still had a few hundred at this time last year. Netflix’s latest regulatory filings show that the lease on its 49,000-square-foot Hillsboro facility runs through April 2016, according to oregonlive.
Netflix has kept DVDs around in part because the DVD subscription business has much higher margins than streaming, and profits from this line of Netflix’s business were essential to finance its first international expansions, according to gigaom.
As fewer customers pay for DVDs, the flow of money is also starting to slow down. In Q3 of 2014, Netflix generated $186.6 million in revenue from DVDs, compared to $319.7 million in the same quarter three years ago.
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