5 reasons Netflix is struggling as it cuts about 1,000 staffers

Netflix is facing challenges as it cuts around 1,000 staff members. The streaming giant's shares have dropped 42% over the past year and nearly halved from their peak last summer. Two main factors are contributing to the company's struggles: slowing engagement growth and intensifying competition. Co-CEO Ted Sarandos acknowledged that the company isn't growing as quickly as desired, and the firm has laid off 6% of its workforce.

Viewing hours are up, but engagement growth has slowed, with a 2% year-over-year increase in global viewing hours to 97 billion. The company will share engagement reports less frequently, focusing on quality and variety instead. The lack of a new breakout hit, such as Stranger Things, is also concerning. Netflix needs fresh franchises and trending shows to replace the ending of its biggest show.

Competition from free streaming services like YouTube, Tubi, and The Roku Channel is also rising, particularly among younger audiences. YouTube currently holds a 14.2% viewership share on US TVs, compared to Netflix's 7.8%. Additionally, Netflix's failed bid for Warner Bros. created uncertainty among investors, who were concerned about potential debt and integration issues. The company has also faced setbacks with its game and podcast initiatives, which haven't yet become major revenue drivers.