Netflix is laying off roughly 1,000 employees — about 6% of its workforce — in its largest round of job cuts since 2022, as the streaming pioneer confronts intensifying competition for viewer attention from legacy rivals and free platforms such as YouTube.
The cuts, detailed in an internal memo from Co-CEOs Greg Peters and Ted Sarandos, will fall heaviest on the company’s product, technology, legal and human-resources teams.
Leadership Cites Need for Discipline
“Our mission — to entertain the world — is ambitious, and delivering on it requires us to be disciplined about where we prioritize our people and resources,” the co-CEOs wrote in the memo sent to employees on Wednesday.
They stressed that the company’s underlying business remains healthy, saying: “Our business is strong and growing, and we remain on track to deliver our full-year forecast.”
Netflix had approximately 16,000 employees at the end of last year. Its shares, which have fallen about 25% so far this year, edged up 0.7% on Wednesday following the announcement.
Investor Doubts Mount Over Growth Trajectory
The layoffs underscore the pressure Netflix faces in sustaining the growth that once upended the US media industry and squeezed traditional cable television businesses.
Engagement — the amount of time users spend on the platform — has become a central concern for investors. Free, user-generated content on YouTube and TikTok gives those platforms a structural cost advantage over Netflix’s subscription model.
A failed bid for Warner Bros Discovery’s streaming and studio assets earlier this year deepened questions about Netflix’s strategy. Paramount completed its $110-billion acquisition of Warner Bros earlier this month, forming Skydance.
Search for a Second Revenue Stream
“They haven’t been able to find like another line of major revenue,” said Ross Benes, senior analyst at eMarketer, noting that Netflix remains heavily reliant on a subscription business that may be approaching a ceiling.
“Eventually, because they’ve kind of nearing a ceiling with that, they’ll need another revenue stream to diversify, and that’s where it’s been more of a struggle,” Benes added.
Netflix has sought to broaden its business beyond subscriptions by investing in an advertising-supported tier, live programming and gaming.
The company’s previous major layoff round came in 2022, when it eliminated about 450 jobs across two rounds after losing subscribers for the first time in more than a decade.
