Netflix plans major staff cuts amid competition for viewers
Kyiv • UNN
Netflix will lay off around 1,000 employees, primarily in its product and corporate teams. This is the company's largest round of layoffs since 2022.
Netflix is laying off 6% of its workforce, or approximately 1,000 employees, in its largest round of cuts since 2022, according to an internal memo seen by Reuters, as the streaming pioneer faces fierce competition for viewers from longtime rivals and YouTube, reports UNN.
Details
Most of the cuts will affect Netflix’s product, technology, legal and human resources teams, according to emails sent to employees on Wednesday by co-chief executive officers Greg Peters and Ted Sarandos.
"Our mission—to entertain the world—is ambitious, and achieving it requires us to be disciplined about where we prioritize our people and resources," the memo said.
"Our business is strong and growing, and we remain on track to deliver our full-year forecast."
In addition
According to The Guardian, Netflix shares, which have fallen by about 25% this year, rose 0.7% on Wednesday. The company had about 16,000 employees at the end of last year.
This year, the streaming company has faced doubts about its ability to sustain the growth that has disrupted the U.S. media industry, putting pressure on the cable television business.
Engagement, or the amount of time users spend on Netflix, has become a key concern for investors, as platforms such as YouTube and TikTok attract viewers with free-to-watch, user-generated content, giving them a price advantage over Netflix.
The unsuccessful pursuit of Warner Bros Discovery’s streaming and studio assets earlier this year deepened doubts about Netflix’s strategy. Earlier this month, Paramount completed its $110 billion acquisition of Warner Bros to create Skydance.
"They have not been able to find another major revenue stream," said Ross Benes, a senior analyst at eMarketer, adding that the company continues to depend on its subscription business, which may be approaching its limits.
"Ultimately, as they approach the ceiling with this, they will need another revenue stream to diversify, and that is where the bigger struggle has been."
Netflix is trying to move beyond its subscription business by investing in an advertising tier, live programming and games.
The last significant round of layoffs took place in 2022, when the company cut about 450 jobs in two rounds after losing subscribers for the first time in more than a decade.
The Wall Street Journal first reported the memo on Wednesday.