In an email to staff, co-CEOs Ted Sarandos and Greg Peters wrote, "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." They added, "Our business is strong and growing, and we remain on track to deliver our full year forecast. We'll continue to invest aggressively in high impact areas to improve our service and further drive growth and innovation. Doing that means making focused choices across the business so we can keep delivering for our members, partners, employees, and investors." Netflix said it had no additional comments beyond the memo.
About 6% of positions, or roughly 1,000 jobs, will be cut, with most of the impact in product, technology, legal and human resources. The leadership message frames this as refocusing talent and spending toward "high impact areas" to upgrade the service and fuel growth. The timing lands a few weeks after Sarandos told the Bloomberg Screentime conference the company was "not growing as fast as I want."
Headcount cuts at a market leader say something about the whole sector. Market Briefs covers media economics free every morning.
Netflix is still the largest player in streaming and continues to generate solid profits, but viewing time has stalled. Recent sign ups have leaned on the password-sharing crackdown and the addition of a lower priced, ad-supported plan. To win more attention, the company has widened its focus to include live sports, documentary content, and video games, while its recent slate has not matched the cultural heat of earlier hits like "Stranger Things" and "Squid Game."
Competition is intense. YouTube remains the primary rival, and Skydance is emerging as a threat. Also on the horizon, Paramount and Warner Bros. Discovery, in a joint effort, plan to bring Paramount+ and HBO Max together under a single umbrella.
Netflix reports quarterly results on Oct. 20. Cost cutting is industry wide too: Disney said last month it would lay off around 300 people, with most reductions in human resources and technology. For your wallet, the thing to track is whether Netflix's tighter focus and continued investment show up as steadier engagement and growth in that Oct. 20 update.
Where a company trims reveals what it no longer expects to grow. Get the free Market Briefs daily newsletter and follow it.
