Netflix is laying off around 1,000 employees, or 6% of its workforce, in its biggest round of job cuts since 2022, as the streaming company faces growing competition from traditional media rivals and video platforms such as YouTube, Reuters reported on Wednesday, citing an internal memo sent to employees.
The cuts will primarily affect the company's product, technology, legal and human resources teams, according to the memo from co-chief executives Greg Peters and Ted Sarandos.
“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 executives said in the email, according to the report.
“Our business is strong and growing, and we remain on track to deliver our full-year forecast,” they added.
Netflix had around 16,000 employees at the end of 2025. Its shares have fallen approximately 25% so far this year, although they rose 0.7% on Wednesday.
Competition puts pressure on viewer engagement
The layoffs come as investors question whether Netflix can sustain the growth that disrupted the US media industry and challenged traditional cable television businesses.
Viewer engagement, measured by the time users spend on the platform, has become an important concern for investors. YouTube and TikTok compete for viewers with free, user-generated content, giving them a cost advantage over subscription-based services such as Netflix.
The company's unsuccessful pursuit of Warner Bros Discovery's streaming and studio assets earlier this year also added to questions about its growth strategy. Paramount completed its $110-billion acquisition of Warner Bros earlier this month, bringing the assets under Skydance.
“They haven't been able to find like another line of major revenue,” Ross Benes, senior analyst at eMarketer, told Reuters, pointing to Netflix's continued dependence on subscriptions.
“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,” he said.
Netflix looks beyond subscriptions
Netflix has been expanding into advertising, live programming and gaming as it looks to diversify revenue beyond subscriptions.
The company's last major round of layoffs came in 2022, when it cut around 450 jobs across two rounds after losing subscribers for the first time in more than a decade.
Netflix shares fell 1.33% to $69.53 in intraday trading on Wednesday, the stock has declined 42.8% over the past year.