Netflix Plans 5% Workforce Cut Amid Slowing Growth
Netflix plans to lay off approximately 800 employees to reduce overhead as the company faces slowing viewer engagement and a declining share price.
Netflix is preparing to lay off approximately 5% of its global workforce, a move that would eliminate between 800 and 850 positions. An official announcement is expected as early as next week, ahead of the company's third-quarter earnings report scheduled for October 20. This represents the first major reduction in staff since 2022.
The restructuring follows a period of slowing revenue growth and a 42% drop in share price over the past year. While revenue rose 13% to $12.6 billion in the April-June quarter, non-content spending on technology and administration grew faster at 18%, driven largely by personnel costs. Co-CEO Ted Sarandos stated that the company is "not growing as fast as I want us to," specifically identifying live programming as a budget drag.
External pressures have intensified as financial analysts from HSBC and Wells Fargo recently downgraded the company, citing worrying engagement trends and the dominance of YouTube in U.S. TV viewing. Additionally, Netflix recently withdrew from an $83 billion bid for Warner Bros. Discovery assets after being outbid by Paramount Skydance. To diversify revenue and address these challenges, the company is shifting its strategic focus toward advertising, gaming, and live events.
