Netflix might need to buy its way out of its biggest problem. And it won't come cheap.

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The king of streaming is shrinking parts of its kingdom.

Netflix is cutting roughly 1,000 employees, or about 6% of its staff, in the streamer's largest round of layoffs since 2022. Product, tech, and HR teams are among the areas being hit.

It comes amid a dark stretch for Netflix's stock, which is down almost 42% over the past year and nearly 25% in 2026. BI's Jame Faris broke down five key reasons why Netflix has been having such a tough time.

But the layoffs didn't immediately ease investors' concerns. Netflix's stock price barely moved, finishing the day up 0.16%. BI's Peter Kafka does a good job of explaining why Netflix's problems won't be solved by job cuts.

Netflix reports earnings on Tuesday, but the streamer's pain point isn't a secret: engagement.

With roughly 325 million paid subscribers, Netflix's reach is still massive. But investors have been dogging Netflix about how long all those people are engaging with its shows.

Things came to a head this summer during Netflix's second-quarter earnings. Following lukewarm results, Netflix said it wasn't going to release audience numbers as often.

Holding back information from investors isn't typically a great sign. But there's an argument that focusing on the performance of Netflix's new, shiny shows is missing the point. The streamer's success often comes from older shows' massive tails.

That still doesn't address the biggest risk to Netflix and other streamers. From TikTok and Instagram to YouTube and free TV, people have a lot of options.

Netflix's job cuts don't mean spending cuts.

One of the biggest areas they've leaned into this year is video podcasts, negotiating a deal with Spotify for popular shows like "The Bill Simmons Podcast" and "The Rewatchables."

Podcast listeners are a loyal audience, returning regularly to consume shows. Bonus points if you can pull them away from a rival like YouTube, where these shows often live. (Granted, it's still early days, so there's no concrete proof this is happening just yet.)

You know who else stays engaged? Sports fans. That's also a space Netflix has aggressively pursued. Early signs were good. Last year Netflix said deals with the NFL and a Jake Paul fight drove surges in daily sign-ups.

But live sports don't come cheap. Netflix has five NFL games this season as part of an expansion of its deal with the league, which started in 2024. The current partnership extends through the 2029 season. That timing coincides with an opt-out clause in the league's much-larger deal with CBS and Fox.

Netflix isn't putting all its sports eggs in the NFL's basket. Earlier this week, it bought the exclusive rights to air the 2030 World Cup in Spain and Andorra. Terms of the deal weren't disclosed, but the 104-game package likely didn't come cheap.

But then again, chasing engagement never is.