Netflix Faces Growing Competition as It Plans 1,000 Job Cuts

Netflix is set to reduce its workforce by approximately 6%, around 1,000 employees expected to lose their jobs in the company’s biggest layoff round since 2022. The layoffs come amid growing pressure from established media rivals and digital platforms like YouTube.

According to an internal memo seen by Reuters, most of the job cuts will affect Netflix’s product, technology, legal and human resources departments. The email was sent to employees on Wednesday by co-CEOs Greg Peters and Ted Sarandos.

In the memo, the executives said the company needed to remain disciplined in deciding how to allocate its workforce and resources to achieve its goal of entertaining audiences worldwide.

They also said Netflix’s business remained strong and continued to grow, adding that the company was still on track to meet its full-year financial forecast.

Netflix shares, which had fallen around 25% so far this year, rose 0.7% on Wednesday. The company had approximately 16,000 employees at the end of last year.

The latest layoffs come as investors question whether Netflix can maintain the growth that helped transform the US media industry and put pressure on traditional cable television businesses.

One major concern is audience engagement, particularly the amount of time viewers spend watching Netflix. Platforms such as YouTube and TikTok have attracted audiences with free, user-generated content, giving them a cost advantage over subscription-based streaming services.

Netflix’s failed attempt earlier this year to acquire Warner Bros. Discovery’s streaming and studio assets also raised questions about its future strategy. Paramount completed its $110 billion acquisition of Warner Bros. earlier this month, forming Skydance.

Ross Benes, a senior analyst at eMarketer, said Netflix remained heavily dependent on subscriptions and could be approaching a limit in that business model. He noted that finding additional major sources of revenue had been a challenge for the company.

To spread its business, Netflix has been spending in advertising-supported subscriptions, live programming and gaming as it seeks to expand beyond its traditional subscription model.

The company’s former main round of layoffs took place in 2022, when it eliminated around 450 jobs in two rounds after losing subscribers for the first time in more than a decade.