Netflix plans to lay off around 1,000 employees, representing about 6% of its workforce, according to a memo obtained by CNBC. The cuts are expected to have the greatest impact on its product, technology, legal and human resources teams.
“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,” Netflix co-CEOs Ted Sarandos and Greg Peters wrote in an email to employees.
“Our business is strong and growing, and we remain on track to deliver our full year forecast. We’ll continue to invest aggressively in high impact areas to improve our service and further drive growth and innovation.
“Doing that means making focused choices across the business so we can keep delivering for our members, partners, employees, and investors,” the executives added.
According to The Wall Street Journal, Sarandos and Peters said Netflix would continue investing in areas they consider high-impact while making targeted decisions about how to allocate resources across the business. They also reiterated that the company remained on track to meet its full-year earnings forecast.
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The layoffs come as the streaming company navigates an increasingly competitive entertainment market.
Traditional media companies are consolidating their businesses, while YouTube continues to capture a growing share of viewership and advertising spending. The competition is putting pressure on streaming platforms to find new ways to attract audiences and generate revenue.
Netflix had about 16,000 full-time employees at the end of last year. Its last major round of layoffs came in 2022, when the company eliminated hundreds of jobs amid slowing growth and subscriber losses. At the time, Netflix was facing challenges as the streaming market matured and competition for subscribers intensified.
Since then, the company has sought to diversify its revenue streams beyond monthly subscriptions. It has expanded its advertising business, introduced more live programming and invested in gaming to reach new audiences and create additional sources of income.
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According to CNBC, Netflix continues to report solid profits and remains the leading player in the streaming market. However, its viewing time has stagnated, while its password-sharing crackdown and the introduction of a lower-priced, ad-supported subscription tier have been key drivers of subscriber growth.
Netflix also faces a potential challenge from the combined entity formed by Skydance and Paramount, alongside Warner Bros. Discovery, which has plans to integrate the Paramount+ and HBO Max streaming platforms.
Netflix had previously attempted to acquire Warner Bros. but eventually withdrew its bid, leaving Paramount to pursue the takeover.