Netflix has announced its biggest layoffs till date. As per reports, the OTT major will cut 6 per cent of its workforce which is about 1000 jobs. Netflix has about 16,000 full-time employees as of date.
As per a report of the Variety, co-CEOs Ted Sarandos and Greg Peters announced the lay-offs to employees in an email on Wednesday morning. The job cuts will impact Netflix’s product, technology, legal and HR teams.
“Our mission — to entertain the world — is ambitious, and delivering on it requires us to be disciplined about where we prioritize our people and resources,” the co-CEOs said in the memo, as per Variety.
In the memo the co-CEOs said Netflix's business is strong and growing, and remain on track to deliver the full year forecast.
"We’ll continue to invest aggressively in high-impact areas to improve our service and further drive growth and innovation," they added.
However, Sarandos and Peters aded, “Doing that means making focused choices across the business so we can keep delivering for our members, partners, employees, and investors.”
The last time Netflix announced job cuts was in 2022 after it reported huge 200,000 subscribers drop in the first quarter of that year. Then it had laid off 450 jobs.
The job cut announcement came days before the OTT major is set to announce its quarterly results on October 20.
Netflix shares rose 0.7% on Wednesday, but have fallen around 25% so far this year. Investors have questioned whether the streaming company can maintain its growth as competition for viewers intensifies in the US media industry.
Platforms such as YouTube and TikTok are drawing viewers with free, user-generated content, raising concerns about the time people spend watching Netflix. This has made user engagement a key focus for investors.
Netflix's failed bid for Warner Bros Discovery's streaming and studio assets earlier this year also raised questions about its strategy. Paramount completed its $110-billion acquisition of Warner Bros earlier this month to form Skydance.
"They haven't been able to find like another line of major revenue," said Ross Benes, senior analyst at eMarketer. He said Netflix continues to depend on subscriptions, a business that could be nearing its growth limit.
"Eventually, because they've kind of nearing a ceiling with that, they'll need another revenue stream to diversify, and that's where it's been more of a struggle."
Netflix is trying to reduce its reliance on subscriptions by expanding into advertising, live programming and gaming.
Read the full memo
The memo (as reported by Variety) read: "Team — We wanted to share that we are making a number of organizational changes and, as a result, we’ll be letting go of roughly 6% of our colleagues, with the greatest impact to our product, tech, legal, and HR teams.
Decisions like these are never easy, and we don’t take them lightly. Our top priority today is to support those who are leaving Netflix. The process will vary somewhat by country, but leaders will be connecting with impacted employees soon. If you are leaving, please know that we will support you throughout this transition and make sure you have as much clarity and context as possible. We also want to say thank you. What you’ve built, and the care you brought to Netflix, have made a lasting difference and we will always be grateful.
For the rest of the team, we know you have questions, too. Our mission — to entertain the world — is ambitious, and delivering on it requires us to be disciplined about where we prioritize our people and resources. Our business is strong and growing, and we remain on track to deliver our full year forecast. We’ll continue to invest aggressively in high impact areas to improve our service and further drive growth and innovation. Doing that means making focused choices across the business so we can keep delivering for our members, partners, employees, and investors.
We know changes like this are tough, but let’s stay focused. This is one of the most dynamic times in the history of entertainment — and it’s a moment perfectly suited to a company like ours that’s built at the intersection of technology and entertainment. Now it’s on us to step up and meet the moment, together, like we always do.
Ted and Greg"
(With inputs from agencies)