United States streaming giant, Netflix, is cutting about 1,000 jobs, representing six per cent of its workforce, amid intensifying competition from rival platforms, including YouTube.
The job cuts, announced in an internal memo sent to employees by co-chief executives Greg Peters and Ted Sarandos on Wednesday, represent the company’s largest round of layoffs since 2022.
According to the memo, most of the affected positions are in the company’s product, technology, legal and human resources departments.
“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,” the executives said.
They added, “Our business is strong and growing, and we remain on track to deliver our full-year forecast.”
The latest workforce reduction comes as Netflix faces growing concerns about its ability to sustain audience engagement and revenue growth in an increasingly competitive streaming market.
Platforms such as YouTube and TikTok have attracted viewers with free, user-generated content, giving them a cost advantage over subscription-based services such as Netflix.
The amount of time users spend watching content on the platform has consequently become an important concern for investors.
Netflix shares, which have fallen by about 25 per cent so far this year, rose 0.7 per cent on Wednesday.
The company had approximately 16,000 employees at the end of last year.
The streaming service has also faced questions about its growth strategy following its unsuccessful attempt to acquire Warner Bros Discovery’s streaming and studio assets earlier this year.
Paramount completed its $110bn acquisition of Warner Bros earlier this month, creating a new entertainment powerhouse under Skydance.
Ross Benes, a senior analyst at eMarketer, said Netflix had struggled to establish another major source of revenue beyond its existing business.
“They haven’t been able to find like another line of major revenue,” Benes said, adding that the company remained dependent on subscriptions, a market he believes could be approaching its growth ceiling.
“Eventually, because they’ve kind of nearing a ceiling with that, they’ll need another revenue stream to diversify, and that’s where it’s been more of a struggle.”
In response to the challenges, Netflix has been expanding into advertising-supported subscriptions, live programming and gaming as it seeks to diversify its income sources beyond conventional subscriptions.
The company last carried out major layoffs in 2022, when it eliminated about 450 positions in two rounds following its first subscriber loss in more than a decade.
The Wall Street Journal first reported the latest job cuts after seeing the internal memo.
