Updated version 2 - Update 1 - Netflix lays off about 6% of its workforce, marking the largest round of layoffs since 2022.

Source updated, analyst comments, details and chart added

Prathik Jayaprakash/Anzar Mehraj

Reuters, October 14 - According to an internal memo obtained by Reuters, streaming pioneer Netflix NFLX.O is cutting 6% of its workforce, about 1,000 employees—its largest round of layoffs since 2022. The company is currently locked in a fierce battle for users with both traditional rivals and YouTube.

In an email sent to staff on Wednesday, co-CEOs Greg Peters and Ted Sarandos said the layoffs were mainly concentrated in Netflix’s product, technology, legal, and human resources teams.

“Our mission—to bring entertainment to the world—is ambitious, and to achieve that, we must remain rigorous in the prioritization of people and resources,” they wrote in the memo.

“Our business remains robust and continues to grow, and we still expect to meet our full-year performance forecast.”

Netflix shares have fallen about 25% so far this year, while rising 0.7% on Wednesday. As of the end of last year, the company had about 16,000 employees.

This year, the streaming giant has faced outside skepticism about whether it can maintain its growth momentum—the very momentum that once pressured the cable TV business and upended the U.S. media industry.

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User engagement—how much time users spend on Netflix—has become a key investor concern, as platforms like YouTube and TikTok attract viewers with free, user-generated content, giving them a cost advantage over Netflix.

Earlier this year, Netflix’s attempt to acquire the streaming and film production assets of Warner Bros. Discovery fell through, deepening questions about its strategy. Paramount earlier this month completed its $110 billion acquisition of Warner Bros. (link), subsequently creating Skydance SKYD.N.

“They’ve never managed to find another major source of revenue,” said eMarketer senior analyst Ross Benes, adding that the company remains reliant on its subscription business, which may be near a growth ceiling.

“Ultimately, since the subscription business may be nearing its growth ceiling, they need to explore new revenue sources to diversify—this is their biggest current challenge.”

Netflix has been trying to expand beyond subscriptions by investing in ad-supported tiers, live programming, and gaming.

The company’s last major round of layoffs was in 2022, when, following its first drop in subscriber numbers in over a decade, it cut about 450 jobs in two rounds.

The Wall Street Journal first reported Wednesday’s memo.

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