Most of the layoffs will affect employees in Netflix's product, technology, legal and human resources departments, according to an email sent to staff by co-CEOs 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 memo, according to Reuters.
Despite the job cuts, Netflix maintained that its business remains on track.
"Our business is strong and growing, and we remain on track to deliver our full-year forecast," the memo said.
Netflix had approximately 16,000 employees at the end of last year.
Why is Netflix cutting jobs?
The layoffs come at a time when investors are questioning whether Netflix can sustain the growth that helped transform the US entertainment industry and put pressure on traditional cable television businesses.
One of the biggest concerns is viewer engagement, or the amount of time subscribers spend watching content on the platform.
Netflix faces increasing competition from YouTube and TikTok, which attract large audiences with free, user-generated videos. Unlike Netflix, these platforms benefit from content that does not require the same level of investment in professionally produced shows and films.
Ross Benes, senior analyst at eMarketer, said Netflix remains heavily dependent on subscription revenue and has struggled to develop another major source of income. "They haven't been able to find like another line of major revenue," Benes told Reuters.
"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."
The company last announced major layoffs in 2022, when it eliminated approximately 450 positions across two rounds of cuts.