Netflix is laying off 6% of its workforce, or roughly 1,000 employees, in its biggest cuts since 2022, according to an internal memo seen by Reuters, as the streaming pioneer faces tough competition for viewers from legacy rivals and YouTube.
The bulk of the job cuts would be in Netflix's product, tech, legal and human-resources teams, the email Co-CEOs Greg Peters and Ted Sarandos sent to employees on Wednesday showed. "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," they said in the memo. "Our business is strong and growing, and we remain on track to deliver our full-year forecast."
Netflix shares, down around 25% so far this year, rose 0.7% on Wednesday. The company had about 16,000 employees at the end of last year.
This year, the streaming giant has faced doubts about its ability to sustain the growth that disrupted the US media industry by putting pressure on cable TV businesses.
Engagement, or the amount of time users spend on Netflix, has become a key concern for investors as platforms such as YouTube and TikTok attract viewers with free-to-watch, user-generated content that gives them a cost advantage over Netflix.
A failed pursuit of Warner Bros Discovery's streaming and studio assets earlier this year deepened doubts about Netflix's strategy. Paramount completed its $110-billion Warner Bros acquisition earlier this month to form Skydance.
"They haven't been able to find like another line of major revenue," said Ross Benes, senior analyst at eMarketer, adding the company remains reliant on a subscription business that could 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."
Netflix has been trying to expand beyond its subscription business by investing in an ad tier, live programming and gaming.
Its last major round of layoffs came in 2022, when it cut about 450 jobs in two rounds after losing subscribers for the first time in more than a decade.
The Wall Street Journal first reported on Wednesday's memo.