Netflix Planning Layoffs Targeting 5% of Its Workforce | Report

Netflix is preparing for major workforce reductions, with the streamer considering cutting 5% of its employees as it grapples with Wall Street's concerns over future growth. Puck reports that the restructuring could be announced as early as next week, though it remains unclear which departments would be impacted. Netflix currently employs around 16,000 full-time staff.

The last major layoff occurred in 2022, while a smaller group of product team employees was let go in February. The planned cuts follow HSBC and Wells Fargo downgrading Netflix stock last month due to declining engagement trends and increased competition from YouTube. In July, Netflix accounted for 7.8% of TV viewership, compared to YouTube's 14.2%, according to Nielsen's latest Gauge report.

To fuel growth, Netflix has ventured into podcasts, live events, sports, vertical video, and gaming, while also attracting YouTube talent and expanding content offerings overseas. In December, Netflix signed a $83 billion deal to acquire Warner Bros. Discovery's studio and streaming assets, but the agreement fell through after failing to match a $110 billion offer from Paramount Skydance.

Netflix co-CEO Ted Sarandos noted that the company is "not growing as fast as I want us to" and acknowledged the need to accelerate progress. Despite the financial challenges, Sarandos affirmed that the WBD acquisition was strategically sound. When questioned about the competitive implications of the Paramount-WBD merger, Sarandos expressed uncertainty, stating that it remains unclear whether the union will yield positive results.

Shares of Netflix, currently priced at $70.96, have experienced a 42% decline over the past year, 22% year-to-date, and 30% over the last six months.