Netflix is laying off 1,000 employees globally, marking its most significant job cuts since 2022. The reductions will primarily impact teams in human resources, legal, product, and technology, representing approximately 6% of its total workforce.
Last month, Netflix co-chief executive Ted Sarandos stated that the company's growth was not meeting his expectations. The streaming industry is currently undergoing a period of consolidation, highlighted by the $110 billion merger of Paramount with Warner Bros. (owner of HBO), while free platforms like YouTube and TikTok continue to gain viewers.
In a communication to staff, Sarandos and co-chief executive Greg Peters affirmed that Netflix would "continue to invest aggressively in high-impact areas to improve our service and further drive growth and innovation." The company had reportedly been close to a deal with Warner Bros. but was ultimately outbid by Paramount.
Regarding these "organizational changes," Sarandos and Peters explained, "Our mission - to entertain the world - is ambitious, and delivering on it requires us to be disciplined about where we prioritise our people and resources." Managers are expected to inform affected employees of their job status "soon."
The email also indicated that the company is on track to meet its financial forecasts. Netflix is scheduled to release its latest financial results on October 20th.
Investors are closely monitoring user engagement, specifically the amount of time customers spend on Netflix, as it competes with platforms such as YouTube and TikTok.
Netflix has continued to commission new shows, with its current most popular series being "Below," an underwater mystery. The company has also been exploring business expansion into areas like gaming and introducing advertisements before and during its content.
However, Ross Benes, a senior analyst at eMarketer, noted that Netflix "haven't been able to find another line of major revenue." He added that the company remains heavily reliant on its subscription model, which may be approaching saturation. "Eventually, because they're nearing a ceiling with that, they'll need another revenue stream to diversify, and that's where it's been more of a struggle," he commented.
The previous major round of layoffs at Netflix occurred in 2022, when approximately 450 jobs were cut following the company's first subscriber loss in over a decade.
