Streaming giant Netflix is reportedly laying off 6% of its workforce, or roughly 1,000 employees, in its biggest cuts since 2022, with the company facing tough competition for viewers from legacy rivals and YouTube.
The bulk of the job cuts would be in Netflix’s product, tech, legal and human-resources teams, said an email from Co-CEOs Greg Peters and Ted Sarandos that was sent to employees on Wednesday, Reuters reported.
“Our mission — to entertain the world — is ambitious, and delivering on it requires us to be disciplined about where we prioritise our people and resources,” the senior leadership said in the memo.
“Our business is strong and growing, and we remain on track to deliver our full-year forecast,” the leadership added further.
Netflix shares, down around 25% so far in 2026, reacted positively to the news, rising by 0.7% on Wednesday.
The streaming giant had about 16,000 employees at the end of last year.
However, 2026 has proven to be a challenging year for the company.
Netflix faces challenges on the engagement front after disrupting the American and global media industry by transforming entertainment from a physical, scheduled, and location-bound product into an on-demand, data-driven, and borderless digital service.
Engagement, or the amount of time users spend on Netflix, has become a key concern for both the streaming giant and its investors, as platforms such as YouTube and TikTok are attracting viewers with free-to-watch, user-generated content that gives them a cost advantage over Netflix.
A failed pursuit of Warner Bros Discovery’s streaming and studio assets earlier this year further messed up things for Netflix.
“They haven’t been able to locate another significant source of revenue,” said Ross Benes, a senior analyst at eMarketer, in an interview with Reuters, noting the company’s reliance on a subscription-based business model that may be reaching its limits.
“Eventually, they’ll need another revenue stream to diversify, and that’s been a struggle,” Benes added.
Apart from the layoffs, Netflix is also trying to expand beyond its subscription business by investing in an ad tier, live programming and gaming.