Netflix takes drastic action as stock plunges 40%, cuts 1,000 jobs

Falling viewing time and intensifying competition make breakthrough urgent

Netflix, the world’s largest video streaming company, will cut about 6% of its workforce as it responds to slowing growth and subscriber departures.

Netflix has decided to carry out a large-scale 'restructuring' that will eliminate about 1,000 jobs worldwide, according to The Wall Street Journal and other major news outlets. It will be the company’s largest round of layoffs since 2022.

Netflix co-CEOs Greg Peters and Ted Sarandos said in an internal email, "Our mission to entertain the world is an ambitious goal, and achieving it requires rigorous judgment about where to prioritize our people and resources." The cuts will be concentrated primarily in 'product development', 'technology', 'legal' and 'human resources'.

The move is directly tied to a decline in the amount of time subscribers spend watching content. Netflix has explored a range of strategies to counter falling user engagement, including introducing live channels, launching 'bundled offerings' with other streaming services, and adding video podcasts and content from 'YouTube creators'.

In particular, the company has recently invested astronomical sums in 'live sports' and major live events as it searches for new revenue models. Netflix has kept its U.S. subscriber churn rate among the lowest in the industry, but revenue growth has slowed noticeably as competition for market share intensifies with major platforms including 'YouTube'.

Netflix shares have plunged more than 40% over the past year as market concerns have mounted. The sweeping job cuts came just one week before the company was scheduled to report quarterly results. Management, however, sought to ease investor concerns, saying it expects to meet its full-year 'earnings outlook' without difficulty.