On Oct. 14, Netflix announced that it will lay off roughly 6% of their employees, around 1,000 individuals. The job cuts will impact the product, tech, legal and HR teams.
Netflix has continued to gain solid profits and remain as the biggest player in streaming, but their viewing time has stagnated over the last few months. Netflix now also has a new threat called Skydance. Skydance is the combined entity of Paramount and Warner Bros which plans to integrate the two companies’ respective streaming services, Paramount+ and HBO Max.
Netflix has also had a shift in what they are producing, moving to diversify their content more by incorporating live sporting events, documentaries and video games. The shows that they are now producing are not reaching the same levels of viewership and subscriber growth as their previous hit shows like “Stranger Things” and “Squid Game.” Netflix’s co-CEO Ted Sarandos stated at the Bloomberg Screentime conference that the company is not growing as fast as they would like to see.
Following the lay-offs, Netflix also abruptly fired Bela Bajaria, the head of content at the company. She has been replaced by ex-Disney executive Peter Rice. Sarandos pushed for a leadership change in the company as Netflix’s stock plummeted by over 40% in the preceding year. Many insiders in the industry are saying that Bajaria was used as a scapegoat for broader pressure that Netflix has been facing.
Netflix is not alone in recent layoffs. Disney has made three rounds of layoffs in 2026 across different parts of the company. Netflix is performing these layoffs to address slower viewer watch-time growth and rising technology expenses, but Disney is conducting layoffs to phase out their dying linear TV business.
So, what’s next? Netflix is cutting costs and operations to match the slow viewership growth. What’s interesting, though, is that Netflix is not suffering debt or high risks. Currently, they’re still maintaining multi-billion-dollar profits. Netflix reported in their quarter back in June that they made a net income of $3.4 billion with $12.56 billion in revenue.
Simply put, Netflix is trying to remain at the top of the streaming industry. Netflix has been the top streaming provider for over a decade and has provided tons of hit shows and movies. Competitors like YouTube and Disney are switching to cheap and fast technology to increase viewership. Netflix is now working with the AI filmmaking company Interpositive (who they have bought back in March of this year) to increase algorithmic and production speed.
On the other hand, cutting costs has caused almost 1,000 people to lose their jobs. These are people working in software engineering, legal counsel, talent management sectors and other roles. Netflix noted in their memo to the employees that the reductions are to reallocate capital and resources into “high-impact areas”.
We will have to see if these layoffs are going to benefit Netflix in the future and how Rice will do as head of content after replacing Bajaria.
