Why Netflix is cutting around 6% of its workforce
What's the story
Netflix has announced a major round of layoffs, cutting around 1,000 jobs or nearly 6% of its global workforce. The move comes as the streaming giant grapples with slowing growth and declining viewer engagement. The cuts will mainly affect teams in product development, technology, legal affairs, and human resources. This is Netflix's largest layoff since 2022.
Executive communication
Rationale behind layoffs
In an email to employees, Netflix's co-CEOs Greg Peters and Ted Sarandos explained the rationale behind these layoffs.
They said that while their mission to entertain the world is ambitious, it also requires them to be disciplined about where they prioritize people and resources.
The executives assured employees that Netflix would continue investing aggressively in high-impact areas while making strategic decisions on resource allocation across the business.
Financial outlook
Peters, Sarandos say Netflix on track to meet earnings forecast
Despite the job cuts, Peters and Sarandos emphasized that Netflix is on track to meet its full-year earnings forecast.
The announcement comes just a week ahead of Netflix's third-quarter results declaration on October 20.
The company last witnessed large-scale layoffs in 2022 after reporting its first subscriber loss in over a decade.
Strategic shifts
To boost viewership, Netflix has tried video podcasts, live sports
Netflix has been struggling with slower growth and declining viewer engagement.
The company has tried different strategies to boost viewership, including video podcasts, YouTube creator shows, live sports, and events.
It is also said to be exploring live TV channels and bundles with other streaming services.
In its July shareholder letter, Netflix announced a partnership with French broadcaster TF1 that gave subscribers in France access to TF1's linear channels and on-demand content as part of their existing subscriptions.
Viewer statistics
In H1 2026, members watched over 97B hours
In its shareholder letter, Netflix said members watched over 97 billion hours in H1 2026, a 2% increase from last year.
The company described engagement as healthy and said it took into account the quality and variety of programming as well as time spent watching.
Starting in 2027, Netflix will publish its viewing report annually instead of biannually to keep focus on revenue and operating profit.