LOS ANGELES: Netflix is set to lay off approximately 1,000 employees, representing around 6% of its workforce, in its largest round of job cuts since 2022, according to a Reuters report citing an internal company memo issued on Wednesday.
The planned reductions come as the streaming platform faces growing competition from established media companies and online video services, particularly YouTube, as it seeks to maintain audience engagement and sustain growth.
An email sent to employees by Netflix co-chief executives Greg Peters and Ted Sarandos indicated that most of the job cuts would affect the product, technology, legal and human resources departments.
In the memo, the executives said the company needed to remain focused on allocating its workforce and resources effectively to achieve its goal of entertaining audiences worldwide. They also maintained that Netflix’s business remained strong and growing, with the company on course to meet its full-year financial forecast.
Netflix shares gained 0.7% on Wednesday despite having fallen approximately 25% since the beginning of the year. The company employed around 16,000 people at the end of last year.
The latest layoffs come amid growing investor concerns about Netflix’s ability to sustain the rapid expansion that reshaped the US entertainment industry and challenged traditional cable television businesses.
One major concern is audience engagement, measured by the amount of time subscribers spend watching content on the platform. YouTube and TikTok have attracted viewers through free, user-generated videos, giving them a competitive advantage in attracting audiences.
Netflix’s unsuccessful attempt earlier this year to acquire Warner Bros. Discovery’s streaming and studio assets also raised questions about its future growth strategy. Paramount completed its $110 billion acquisition of Warner Bros. earlier this month, bringing the company under the Skydance banner.
Ross Benes, a senior analyst at eMarketer, said Netflix remained heavily dependent on subscription revenue and faced challenges in developing additional major income sources as its existing business approached potential growth limits.
To diversify its revenue, Netflix has been expanding beyond traditional subscriptions through advertising-supported plans, live programming and gaming.
The company’s previous major round of layoffs took place in 2022, when it eliminated approximately 450 positions in two rounds following its first subscriber decline in more than a decade.
The Wall Street Journal was the first to report the internal memo announcing the latest workforce reductions.
