With layoffs and a firing, Netflix hurries to rewrite its narrative

[NEW YORK] Plenty seems to be working for Netflix these days as it remains the most-watched paid streaming service in the world with over 325 million subscribers, but an abrupt executive shakeup and mass layoffs have underscored growing pressure from Wall Street.

Yet on Wednesday (Oct 14), Netflix let go of roughly 1,000 employees, about 6 per cent of its ranks, in its biggest round of job cuts in four years.

And on Thursday, it made an abrupt leadership change, pushing out Bela Bajaria, who oversaw all of the company’s TV series, movies, live events, sports and video podcasts, and replacing her with Peter Rice, a Fox and Disney veteran.

Two intertwined factors helped drive the moves, which reverberated throughout Hollywood last week.

The company is not growing fast enough, as Ted Sarandos, the company’s co-chief executive officer, said recently.

And Netflix’s stock price has plummeted more than 40 per cent over 2026.

“These are moves that Netflix has to make,” said Mike Proulx, vice-president and research director at Forrester, a research and advisory firm.

“The company has to be acting in a more bold way, especially given what’s going on with its competition right now.”

Netflix has seen the time spent by viewers stall as it struggles to find new global hits to replace blockbuster series such as Stranger Things, which ended in 2025.

YouTube, one of Netflix’s biggest competitors, has seen its share of television viewing time in the US increase over the past year while Netflix’s has declined, according to Nielsen.

In September, the streaming service had its worst showing at the Emmys in a decade, even though it spends more than three times as much on content as it did in 2016.

And some of the biggest names Netflix had lured with lucrative production deals have left for competitors.

The Duffer brothers, the creators of Stranger Things, decamped for Paramount in 2025.

Shawn Levy, an executive producer of Stranger Things, announced in September he was leaving for Disney.

Director David Fincher, who brought House of Cards to Netflix and will release his latest movie, The Further Mis-Adventures of Cliff Booth, on the service at the end of December, opted to let a deal with the company lapse, and Noah Baumbach (Marriage Story, Jay Kelly) left for Warner Bros.

“The stock is down for one reason: There is a perception that their engagement challenges will create headwinds for revenue growth,” said Rich Greenfield, founder of LightShed Partners, a research firm.

“The only way Netflix is going to improve their stock”, he added, “is by proving that the slower engagement is not impacting revenue growth”.

Warner Bros bid threw business narrative off

Netflix’s share price began sliding in 2025 when it made an audacious bid for Warner Bros Discovery’s studio and streaming business.

The potential acquisition, on which Netflix was prepared to spend more than US$80 billion, seemed to undercut a central premise that Netflix was just fine on its own producing hit movies and shows, and instead needed to look outside the company for help.

“We’ve been builders, not buyers,” was a phrase Sarandos repeated for years.

But when Sarandos announced the deal, he said the well-oiled studio business of Warner Bros would be a critical asset for the company.

“Our deep development pool is quite shallow,” he said at the time.

Netflix ultimately lost out on that prize to Paramount Skydance.

At a Bloomberg conference in September, Sarandos acknowledged that “the deal itself kind of threw the business narrative off for investors”.

But he said he did not regret the pursuit.

“You have to be willing to put the business narrative at risk for something that’s good for the long term of the business,” he added.

Even after Netflix abandoned its bid, the share price kept sliding.

Concerning viewership numbers have played a part.

Netflix recently shifted its own reported metrics from subscriber figures to how much time each user is spending on its programmes.

It is one of the few streamers to report data this way, and observers have watched as shows and movies generate lower numbers than before.

Popular television series including Beef, The Night Agent and Avatar: The Last Airbender had significant viewership declines for their most recent seasons, according to Netflix’s metrics.

And no film released this summer became a breakout hit, compared with last summer when KPop Demon Hunters and Happy Gilmore 2 dominated the culture and were big hits on the service.

Their statistics underscored just how much Netflix was struggling to maintain hits or find new ones.

“In so many ways, this is a self-inflicted wound,” said Greenfield, observing that no other streamer reports this type of data.

Third-party measures have not been much kinder.

Netflix accounted for 7.8 per cent of all television viewing time in the US in July, according to Nielsen, a full percentage point drop from 2025.

YouTube’s share is more than 14 per cent, while Disney’s streaming services (4.7 per cent), Prime Video (4.2 per cent) and everyone else are far behind.

Sarandos acknowledged in a memo to employees on Thursday that he saw the company’s leadership change as “an opportunity to take our slate to the next level”, particularly in the US.

He told the well-liked Bajaria about her firing only late in the day on Wednesday, hours after the company had announced the job cuts, according to two people briefed on the discussion.

Bajaria, who joined the company in 2016 and succeeded Sarandos as chief content officer in 2023, favoured big-tent shows and movies, a quality that she once likened to a “gourmet cheeseburger” – content that is “premium and commercial at the same time”, she told The New Yorker.

Strategic shifts and leadership transition

Between a poor performance at the Emmys – Netflix won just 16 in the 2026 edition, its lowest total since 2016, and well below Apple TV and HBO Max – and trouble finding a commercial blockbuster, the company was having difficulty on both fronts.

Netflix also pivoted in many different directions over the past few months.

It has signed up dozens of video podcasts and made deals with YouTube creators such as Sean Evans.

“They recognised that they need to be in the creator business, and they’re leaning hard into it,” Greenfield said.

“I think the greatest proof point that it’s working is that others are following.”

Netflix has explored becoming more of a streaming destination, and has absorbed a local broadcaster onto the service in France.

It has had discussions with Fox and NBCUniversal about making deals to add Fox One and Peacock content as well.

Now Netflix is bringing in Rice, a seasoned executive with three decades of experience in film and television.

He has been a producer, run a film studio (Fox Searchlight), and run a sprawling television division at Disney.

His tenure at Fox included the shepherding of indie hits such as Little Miss Sunshine, Juno, and Slumdog Millionaire, which captured the Oscar for best picture in 2009.

Those who have worked for him describe him as someone who both knows how to function inside a big operation and can talk to complicated directors in ways that make their work better.

When Rice was fired at Disney, director Danny Boyle, who worked with Rice on Slumdog Millionaire, praised him as “the best executive I’ve ever worked with”.

“I always felt that he was destined to run a large company,” said Joe Pichirallo, a professor at New York University’s Tisch School of the Arts and a former Fox Searchlight executive, who described Rice’s tastes as both elevated and accessible.

He added, “a cheeseburger would not fit in my definition of Peter Rice”. NYTIMES