Netflix will lay off approximately 1,000 employees, representing about 6% of its workforce, according to an internal memo obtained by CNBC, as the streaming company seeks to focus its resources on areas it considers most important for future growth.
The job cuts, announced on Wednesday, will largely affect employees in product, technology, legal and human resources departments. The announcement comes days before Netflix is due to report its quarterly earnings on 20 October.
In a memo to employees, co-chief executives Ted Sarandos and Greg Peters said the company intended to maintain investment in areas expected to improve its service and support growth and innovation.
“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 wrote.
“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,” they said.
The memo added that the company would make focused decisions across its operations to continue delivering for its members, partners, employees and investors. Netflix said it had no additional comments beyond the co-chief executives’ message.
The reductions follow remarks by Sarandos last month at the Bloomberg Screentime conference, where he said Netflix was “not growing as fast as I want”. The statement came as the company continued to report solid profits while facing challenges in expanding viewership and attracting new subscribers.
Netflix remains the largest player in the streaming sector, but its viewing time has stagnated in recent months, according to the source material. Its principal drivers of new subscriber acquisitions have been a crackdown on password sharing and the introduction of a cheaper, advertising-supported subscription tier.
The company has also faced growing competition for viewers’ attention. YouTube has emerged as its biggest threat, while a planned combination involving Paramount and Warner Bros. Discovery presents another competitive challenge. The combined entity, Skydance, plans to integrate the companies’ streaming services, Paramount+ and HBO Max.
Netflix has sought to broaden its content offering to compete for audiences, expanding into live sports, documentaries and video games. However, it has struggled to produce hits comparable to “Stranger Things” and “Squid Game”, which previously helped drive subscriber growth and viewing figures.
The planned workforce reduction comes amid wider cost-cutting in the media industry. Last month, Disney announced that it would lay off around 300 employees, with most of the reductions affecting human resources and technology roles.
For Netflix, the latest cuts coincide with an effort to concentrate resources on selected business priorities while maintaining its stated financial outlook. Sarandos and Peters said the company remained on track to meet its full-year forecast and would continue investing aggressively in areas intended to improve its service and drive growth.
