Netflix laying off 6% of its workforce, in biggest round of job cuts at streaming giant in years

Netflix has reduced its workforce by 6%, equivalent to approximately 1,000 employees, marking its largest cut since 2022, according to an internal memo obtained by Reuters. The company announced the layoffs on Wednesday in a message from Co-CEOs Greg Peters and Ted Sarandos to staff. The majority of the positions impacted will be in Netflix's product, technology, legal, and human resources departments.

In their memo, the Co-CEOs emphasized that while the mission to entertain the world remains ambitious, the company must prioritize resources and personnel effectively. They reassured that their business is strong and growing, and they are on track to meet their full-year forecast. Despite facing challenges, Netflix's shares experienced a slight increase on the day of the announcement.

The streaming platform boasts around 16,000 employees. In recent times, Netflix has come under scrutiny for its ability to maintain growth, which has disrupted the US media industry, putting pressure on traditional cable TV businesses. One key area of concern for investors is user engagement, the amount of time viewers spend on Netflix.

The platform has been grappling with this issue as competitors like YouTube and TikTok lure users with free-to-watch, user-generated content, which presents a cost advantage over Netflix. Additionally, Netflix's failed attempt to acquire Warner Bros Discovery's streaming and studio assets earlier this year further fueled doubts about the company's strategy.

Paramount recently completed its acquisition of Warner Bros Discovery's assets for $110 billion, forming Skydance. According to Ross Benes, a senior analyst at eMarketer, Netflix has not yet found another significant source of revenue, relying heavily on its subscription model that may be nearing its peak. The analyst noted that the company has been struggling to diversify, which has posed a significant challenge.

Netflix's last major round of layoffs occurred in 2022, when the company cut about 450 jobs in two rounds following a decline in subscribers for the first time in over a decade. The Wall Street Journal reported on Wednesday's memo.