Netflix is laying off roughly 6% of its workforce, close to 1,000 people, in its biggest round of cuts since 2022.
Co-CEOs Ted Sarandos and Greg Peters told staff on Wednesday morning, and the news was first reported by The Wall Street Journal. The company had about 16,000 full-time employees at the end of last year, per its annual filing.
Most of the cuts land in product, technology, legal and human resources. Netflix says the business is strong, that it remains on track to hit its full-year forecast, and that it will keep spending heavily in areas it considers important.
The announcement comes a week before its next quarterly earnings report.
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Why Now?
The company’s core problem is attention. Netflix was the default TV app for years, but YouTube is reported to have passed it in average daily viewing in 2025, and TikTok and Instagram are closing in on engagement.
Shares have dropped more than 40% over the past 12 months. Sarandos admitted at Bloomberg’s Screentime conference that Netflix is not growing as fast as he wants.
However, the numbers are not a disaster. Netflix reported $45.2 billion in revenue for 2025, and ad revenue passed $1.5 billion. People who subscribe tend to stay. The worry is that they are not spending enough time on the service, and that growth is cooling.
Netflix has thrown a lot at this. It raised prices, expanded its ad-supported tier, added live events and sports, bundled with other streaming services, and brought in video podcasts and YouTube creators’ shows.
It has also tried short-form video, AI-assisted features and a redesigned mobile app. Whether any of it has moved the needle enough is exactly what investors are questioning.
The Failed Warner Bros. Bid
The layoffs also follow a failed bid for the studio and streaming businesses of Warner Bros. Discovery. Netflix lost a long bidding war to Paramount Skydance earlier this year. Those assets included studios, HBO, streaming platforms, games, and networks like CNN and HGTV.
Netflix walked away with roughly $9 billion, which is a consolation prize, but it also means the big acquisition that might have changed its growth story did not happen.
READ: Paramount Wins the Warner Bros. Battle as Netflix Walks Away
Where the Scrutiny Is Falling
Reporting from the Too Much TV Newsletter, which said on October 1 that large layoffs were coming, points to divisions Netflix leaders see as weak on returns. Physical experiences are one.
Sources told the newsletter the retail and experiential push looked promising but had not yet justified its costs.
Gaming is another sore spot. Netflix has spent heavily on games without carving out a strong position. It closed Night School Studio in Hollywood in August and plans to shut Moonloot in Helsinki. Further changes in the division are possible, according to the newsletter.
Comparing with 2022
The last time Netflix made cuts on this scale was June 2022, right after it lost subscribers for the first time in over a decade. This round is different in one way: subscribers are not the issue.
Netflix is not shrinking, but it is no longer clearly the center of how people watch video, and it is trimming its administrative and technical ranks while deciding which of its many side projects deserve money.
Netflix is not alone. Disney and Amazon have both cut significant headcount in recent months.
In their memo, Ted Sarandos and Greg Peters said the process would vary by country and that managers would contact affected employees soon, adding that supporting those leaving was the top priority.
Whether the cuts are a one-time trim or the start of a broader reset is something the earnings report next week may start to answer.
