Netflix cut about 1,000 employees, roughly 6% of its staff, as its shares sit 42% lower over 12 months. Slower viewership growth, free rivals such as YouTube and a failed Warner Bros. bid have unsettled some investors.
Netflix cut about 1,000 employees on Wednesday, roughly 6% of the company and its biggest round of layoffs in four years. The streamer's shares are down 42% in the last 12 months and have nearly halved from their all-time high last summer.
Co-CEOs Ted Sarandos and Greg Peters said in a memo that the company is still on track to reach its financial goals this year.
Viewership growth slows
Netflix grew global viewing hours by 2% year over year to 97 billion in the first half of 2026. Sarandos told Bloomberg last month: "we're not growing as fast as I want us to".
Investors worry that slower engagement growth could hurt Netflix's ability to retain customers and persuade them to pay more, though the streamer has an industry-low cancellation rate. Meanwhile, "Stranger Things," the platform's biggest show ever, ended last year.
Free rivals gain ground
Competition adds pressure. YouTube held a 14.2% share of US TV viewership in July, nearly double Netflix's 7.8%, according to Nielsen. The Roku Channel and Tubi hold shares of 2.9% and 2%, respectively.
In response, Netflix is investing in video podcasts and creators. Peters has said the company is considering a free offering in some markets. Games and podcasts, however, have yet to become breakout hits.
A failed Warner Bros. bid
Netflix also made an $82.7 billion bid for Warner Bros. studio and streaming assets, which spooked some shareholders. Paramount Skydance eventually bought the whole company.
The streamer pocketed a $2.8 billion breakup fee when the deal fell apart, but the stock never fully recovered.
Source: Business Insider
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