Netflix Plans Major Job Cuts Amid Slowing Growth
Netflix is reportedly considering laying off around 850 employees, which constitutes about 5% of its workforce, as part of a broader restructuring effort. This move comes during a challenging time for the streaming giant, which has faced decreasing viewer engagement and a decline in share price throughout the year. The company is expected to announce these layoffs as early as next week, just ahead of its third-quarter earnings report scheduled for October 20.
If these job cuts proceed, they will mark Netflix’s largest round of layoffs in four years. Current estimates suggest that Netflix employs around 17,000 people globally, though its own filings list about 16,000 full-time workers as of the end of 2025. This means the final number of layoffs could be closer to 800, and it’s still uncertain which departments will be most affected.
Job Cuts Among Wider Industry Layoffs
The potential layoffs follow a rough patch for Netflix, which saw a loss of 200,000 subscribers in a single quarter last year—its first drop in more than a decade. Earlier this year, the company let go of about 450 employees across various rounds of cuts. The decline in stock value, which has dropped over 40% in the past year, has put additional pressure on the company. Recent challenges are attributed to several factors, including a failed acquisition attempt for Warner Bros and modest engagement growth.
Industry-wide layoffs in the media sector have become more common, with Disney also making significant job reductions. In a Bloomberg event last month, co-CEO Ted Sarandos acknowledged the company’s struggles, stating, “Overall, we’re not growing as fast as I want us to.” He mentioned that live programming has been a drain on resources, consuming about 5% of the content budget while attracting only 1% of total viewing.
Balancing Costs and Revenue
While Netflix continues to generate revenue—reporting a 13% increase to $12.6 billion in the April to June quarter—its costs are rising even faster. Expenses related to marketing, technology, and administration surged 18% to approximately $2.3 billion. Personnel costs alone jumped by $142 million, contributing to an overall headcount increase of about 2,000 full-time employees since 2025.
Although revenue growth has slowed from 18% last year to a projected 12% for the upcoming quarter, Netflix aims to achieve a 31.5% operating margin for 2026, up from 29.5% in the previous year. The expected layoffs are seen as a way to align overhead costs with slowing sales, preparing the ground for Sarandos and co-CEO Greg Peters to present a strong cost-management narrative during the next earnings call. Investors will be keen to hear how upcoming initiatives in advertising, live events, and gaming will help drive future growth.
