Netflix is laying off about 1,000 employees, roughly 6% of its staffers, in its biggest round of cuts since 2022, a person familiar with the plans confirmed.
Co-CEOs Ted Sarandos and Greg Peters notified employees about the downsizing in a memo on Wednesday. Netflix is contending with slowing engagement growth and a lagging stock price that’s down more than 30% over the last six months and over 40% over the past year.
The streaming giant is letting go of staffers primarily across the product, tech, HR, and legal teams, Sarandos and Peters said in their memo. The Wall Street Journal first reported the news.
Netflix’s mission to entertain the world “requires us to be disciplined about where we prioritize our people and resources,” Sarandos and Peters said. They said the streaming giant’s business is “strong and growing” and added that the company is on pace to hit this year’s financial goals.
Other media giants have made cuts in recent weeks. NBCUniversal said in early October that it’s parting with a few hundred global streaming tech employees, while Disney did its third round of layoffs in six months in late September.
Netflix’s cuts come a week before it reports third-quarter earnings, which will be after the closing bell on October 20. Its last major round of layoffs was in 2022, after the company lost subscribers for the first time in more than a decade.
Sarandos said at a Bloomberg event in late September that “we’re not growing as fast as I want us to, and we’re working on making that move faster.”
Paid streamers have faced pressure overall as free services like YouTube and Tubi have gained popularity. Netflix and its rivals are turning to podcasts and creator content to win over viewers. Disney+ and Paramount+ are planning to add free tiers, and Netflix’s Peters said this summer that “a free offering could make sense in some markets.”
Netflix met Wall Street’s earnings expectations last quarter but said it would start posting its detailed engagement report once a year, instead of twice a year. The company told shareholders that “engagement is not just the quantity of view hours, but also refers to the quality and variety of our offering.”
The reporting change troubled investors, as engagement is generally correlated with subscribers’ willingness to stick around and pay higher prices. (Netflix hiked prices in March to $19.99 a month from $17.99 for its standard ad-free plan and to $8.99 for its ad-supported plan, up from $7.99.)
Netflix’s viewership grew 2% in the first half of the year. Its 97 billion viewing hours are likely far higher than any of its paid streaming peers, which don’t disclose engagement in the same way.
Netflix generated 7.8% of viewership on US TVs in July, according to the latest data from Nielsen, below YouTube’s 14.2% share but well above third-place Disney’s streamers at 4.7%.
However, Netflix’s streaming viewership share is down from 9% in December, which was its highest mark in more than five years, thanks to hit shows like “Stranger Things.”
Read the full memo from Sarandos and Peters below:
Team — We wanted to share that we are making a number of organizational changes and, as a result, we’ll be letting go of roughly 6% of our colleagues, with the greatest impact to our product, tech, legal, and HR teams. Decisions like these are never easy, and we don’t take them lightly. Our top priority today is to support those who are leaving Netflix. The process will vary somewhat by country, but leaders will be connecting with impacted employees soon. If you are leaving, please know that we will support you throughout this transition and make sure you have as much clarity and context as possible. We also want to say thank you. What you’ve built, and the care you brought to Netflix, have made a lasting difference and we will always be grateful. For the rest of the team, we know you have questions, too. 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. Our business is strong and growing, and we remain on track to deliver our full year forecast. We’ll continue to invest aggressively in high impact areas to improve our service and further drive growth and innovation. Doing that means making focused choices across the business so we can keep delivering for our members, partners, employees, and investors. We know changes like this are tough, but let’s stay focused. This is one of the most dynamic times in the history of entertainment — and it’s a moment perfectly suited to a company like ours that’s built at the intersection of technology and entertainment. Now it’s on us to step up and meet the moment, together, like we always do. Ted and Greg
