Netflix has initiated a major round of layoffs today, eliminating about 6% of its global staff or some 1,000 jobs for its biggest round of job cuts in four years.
The product, tech, legal and HR teams are among the most impacted by the cuts, which have been expected as the company faces slower growth and increased competition.
Co-CEOs Ted Sarandos and Greg Peters unveiled the move in a memo to employees Wednesday, a copy of which was obtained by Deadline. A rep for Netflix had no comment.
“Decisions like these are never easy, and we don’t take them lightly,” the CEOs said in the company email, which you can read in full below. “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.”
Sarandos and Peters acknowledged the challenging media environment, calling it “one of the most dynamic times in the history of entertainment” that is “perfectly suited to a company like ours that’s built at the intersection of technology and entertainment,” adding, “Now it’s on us to step up and meet the moment.”
Netflix had not undergone significant layoffs since the big staff reduction of 2022, with the February product division cuts of several dozen employees among the most notable ones.
The share price of the giant streamer has dropped more than 40% over the past year as Wall Street has increasingly scrutinized its viewer engagement, which increased only 2% over the first half of the year to 97 billion hours viewed.
Sarandos addressed the topic of growth earlier this month at a Bloomberg conference. “Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster,” he said.
The company’s unsuccessful bid for the Warner Bros. studio and streaming assets also spooked Wall Street as investors took it as a sign the company felt it needed a major deal to continue to grow, a notion Netflix’s top executives have dismissed.
Additionally, the streamer has gone through one of its longest draughts without a breakout new series that has captured the zeitgeist the way shows like Stranger Things, Squid Game, Bridgerton, Queen’s Gambit, Wednesday, Baby Reindeer, and, most recently Adolescence, did. (It recently found success with its latest Harlan Coben adaptation, I Will Find You, which landed on the Most Popular English series list.) Netflix also is coming off a rare third-place finish at the Emmys behind rivals Apple TV and HBO.
Interest in Netflix’s existing series is showing signs of waning too, with many returning series posting season-to-season viewership declines.
The streamer has been shifting strategy by leaning into live events including sports — with upcoming NFL Thanksgiving Eve and Christmas Day games and the Tyson Fury vs. Anthony Joshua boxing match — as well as podcasts and creator-driven content.
It’s also been raising its profile in theatrical distribution with its upcoming features The Misadventures of Cliff Booth, La Bola Negra and Possible Love all set for theatrical release before hitting the platform. Coming up on the series front are The Hunting Wives S2, The Diplomat S4, the final season of Emily in Paris, Pride and Prejudice, and Lupin: Part 4.
In the most recent second quarter, Netflix reported revenue growth of 13% year over year to $12.6B, and operating margin was 33%. The company reports Q3 earnings on Oct. 20.
Here is Sarandos and Petrers’ memo in full:
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
Jill Goldsmith contributed to this report