Netflix, the world's largest video streaming company, will cut about 6% of its total workforce. The move marks its largest restructuring in four years, coming as intensifying competition from free video platforms such as YouTube and TikTok fuels concerns about slowing growth.
Netflix will cut about 1,000 jobs worldwide, Reuters reported on the 14th. It is the company's largest reduction since 2022, when Netflix shed about 450 jobs in two rounds after its subscriber numbers fell for the first time in more than a decade. As of the end of last year, Netflix employed about 16,000 people.
The cuts will be concentrated in the product, technology, legal and human resources divisions. "Our mission to entertain the world is an ambitious goal," co-Chief Executive Officers Greg Peters and Ted Sarandos said in a memo to employees, adding that achieving it requires rigorous judgment about where to prioritize people and resources.
Netflix is widely credited with reshaping the U.S. media industry and undercutting the position of the traditional cable television business. Recently, however, doubts have grown over whether it can sustain that growth, as YouTube and TikTok rapidly absorb viewer attention with user-generated content available free of charge. Because both platforms run on content made by their own users, they are also seen as holding a cost advantage over Netflix, which must spend heavily on production.
Netflix has worked to diversify its content and services to increase viewing time and stem customer defections. It has expanded live programming, including sports events and various live broadcasts, while pursuing bundled offerings with other streaming services. Still, the company appears to be struggling to secure a new growth engine beyond its subscription-centered business model.
A plan to expand through a large merger or acquisition also collapsed. Earlier this year, Netflix pursued a deal to buy Warner Bros. Discovery's streaming and film and television production businesses, but failed to close it.
Concerns about growth are showing up in the stock price. Netflix shares have fallen more than 40% over the past year. Ross Benes, a senior analyst at research firm eMarketer, pointed to the possibility that Netflix's subscription business is approaching the limits of its growth, saying the company has yet to identify another major source of revenue.
The restructuring was decided about a week before Netflix's quarterly earnings release. Company executives emphasized that the business continues to grow solidly and that plans to meet its full-year earnings forecast are proceeding without disruption.