Netflix Layoffs Hit About 1,000 Jobs as Engagement Growth Slows

What happened

On Wednesday, Netflix told employees it will cut roughly 6% of its global workforce, or about 1,000 jobs. Co-CEOs Ted Sarandos and Greg Peters announced the cuts in an internal memo.12 The memo says product, technology, legal and human resources will be hit hardest.28 The Wall Street Journal reported the memo first, and CNBC, Variety, Deadline, Axios and NBC News later obtained copies.481673 Netflix confirmed the cuts to TechCrunch but did not add anything beyond the memo.81

The executives tried to strike two notes at once. They told staff that the business is "strong and growing," that Netflix is still on track to hit its full-year forecast, and that it will "continue to invest aggressively in high impact areas."1 They also said the company has to be "disciplined about where we prioritize our people and resources," and that decisions like this are never easy.116

The cuts were expected. Last week Puck News reported that Netflix was planning a restructuring affecting about 5% of staff, which would have been about 800 jobs. Netflix declined to comment at the time.5 The final number came in higher than that early report.

How big are the cuts?

Outlets describe the size of the cuts in two ways. Variety, City News Service and IGN call them Netflix's largest layoffs ever.214 Reuters, the Guardian, CNBC, Forbes and Quartz call them the biggest since 2022.410 Both are accurate, but the first is closer to the facts. In 2022, after Netflix reported its first subscriber loss in more than a decade, it cut about 450 jobs over two rounds.42 Cutting about 1,000 jobs is more than twice that.17 Calling it the "biggest since 2022" makes it sound smaller than it is.

The company had about 16,000 full-time employees at the end of 2025. Its annual filing put about 10,900 of them in the U.S. and Canada.15 Netflix had already made smaller cuts this year, including several dozen jobs in its global product team.514

The memo names four departments, but early reports show the cuts reach beyond them. Deadline reported that Doug Belgrad, a vice president of film, is leaving amid the layoffs. It also reported that film executive Sheroum Kim and several TV executives were affected.6 It is too early to say whether creative teams were cut on purpose or caught up in wider reorganizing. Either way, the cuts are not limited to back-office staff.

A profitable company is cutting staff

Netflix is not cutting because it is losing money. In 2025 it reported $45.2 billion in revenue, up 16%, and $11 billion in net income, up 26%.14 Second-quarter 2026 revenue rose about 13% to roughly $12.6 billion, with an operating margin of about 33%.611 For the full year, the company expects revenue of $51.0 billion to $51.4 billion and a 31.5% operating margin.2

The trouble is growth and attention, not profit. Members watched more than 97 billion hours in the first half of 2026, only 2% more than a year earlier.3 In July, Netflix said it would publish its detailed engagement report once a year instead of twice. Business Insider reported that investors were uneasy because engagement usually tracks whether subscribers keep paying and accept price increases.9 Quartz reported that the stock fell more than 8% after hours following those results.10 At a Bloomberg conference in late September, Sarandos said, "we're not growing as fast as I want us to."316

CNBC called the situation a paradox. Netflix is still the largest and most profitable streamer, but viewing time has stalled. Recent subscriber gains have come mostly from the password-sharing crackdown and the cheaper ad-supported plan.1 Those gains don't repeat on their own once they've been captured. Quartz, citing Antenna data, reported that Netflix still has the lowest cancellation rate in U.S. streaming, at just over 2%.10 Netflix keeps its customers well. The question investors are asking is where its next big source of growth will come from.

The market is pushing Netflix to show discipline

The stock helps explain the timing. Reported declines vary by source and date, but all are steep: about 22% this year according to Forbes, about 25% according to Reuters and Deadline, and more than 40% over the past 12 months.46 Deadline put the share price just under $70, down from a 52-week high of $125.6 Reports on Wednesday's trading disagreed. Reuters had the shares up 0.7%, Variety had them down 1.4% at midday, and Yahoo Finance said they rose slightly before slipping.4213 In short, the market barely reacted.

The cuts come less than a week before Netflix reports third-quarter earnings on October 20. Its own forecast for the quarter came in below Wall Street's expectations.1511 Yahoo Finance reported that analysts expect cost savings to be a main topic on the call.13 It is reasonable to read the layoffs as partly a message to investors before that call. The company is showing it can protect margins while revenue growth slows.

The lost Warner Bros. deal

Many reports link the layoffs to Netflix's failed bid for Warner Bros. Discovery's studio and streaming businesses. Netflix said in February it would not raise its offer. Paramount Skydance completed its roughly $110 billion acquisition earlier this month.154 Forbes argues that losing the deal left Netflix without the large catalog it had counted on for long-term growth, which pushed management toward cost cuts and restructuring. Deadline offers a more cautious view. It says investors took the bid as a sign that Netflix believed it needed a big acquisition to keep growing, something executives deny.6

In my view, Forbes is closer to right. Netflix tried to buy growth, lost, and is now cutting costs internally. The competitor that came out of the deal makes the pressure worse. Yahoo Finance cited one analyst who said the combined company's studios, franchises such as Harry Potter and $30 billion annual content budget make it the biggest threat to Netflix. The same analyst said Netflix is the only major entertainment company without a full range of content, including a strong film slate and sports.13

Competing for viewers' time

Traditional studios are not Netflix's only rivals. YouTube, TikTok and Instagram compete for the same viewing time. TechCrunch notes reports that YouTube passed Netflix in average daily viewing in 2025.8 eMarketer analyst Ross Benes told Reuters that Netflix hasn't found another major source of revenue and depends on a subscription business that may be close to its limit.4 Axios makes a similar point. Unlike its larger rivals, Netflix has no theme parks or consumer products to fall back on when streaming gets harder.7

Netflix has tried several fixes: an ad tier, live sports and events, games, video podcasts, creator content and a redesigned mobile app.86 Live programming has been costly for the attention it earns. Sarandos has said live events take about 5% of the content budget but account for only about 1% of viewing.5 Deadline adds that Netflix hasn't had a breakout series in some time and finished third at the Emmys.6

Why tech workers should watch this

The cuts fall heavily on product and engineering, the teams that build Netflix's recommendations, ad systems and apps. Those are the same tools Netflix needs to win back viewers.17 That is a risk: the company is cutting technical staff while saying technology is its advantage. The memo describes the moment as suited to a company "built at the intersection of technology and entertainment."6

Netflix is also part of a wider pattern. Disney said last month that it would cut about 300 jobs, mostly in HR and technology.1 Amazon has also made major cuts, and Deadline expects Skydance to follow.610 AI adds another layer. In August, Netflix co-founder Reed Hastings warned that some CEOs may need to cut their workforces in half because of fast AI progress.15 Netflix did not mention AI in the memo, and nothing in the reporting shows AI caused these cuts. Still, one of the industry's best-known founders is publicly talking about smaller workforces, and the company he built is now cutting technical and administrative staff.

My take

This was not an emergency move. Netflix is profitable, keeps subscribers well and is on track to meet its forecast. The company is slimming down because its old growth formula is running out, its main acquisition plan failed, and investors want proof of discipline before Tuesday's earnings call. Because the cuts are concentrated in tech and product, the company is betting it can build a better product with fewer people. The earnings call and the engagement numbers that follow will show whether that bet holds up. The roughly 1,000 people losing their jobs will feel the impact right away.