Netflix Announces Its Biggest Layoff Ever as Streaming Growth Stalls: What the Cuts Mean

Netflix has spent years as the streaming industry’s gold standard, but even the biggest name in the business isn’t immune to the pressures of a slowing market. Wall Street has been watching closely for signs that its growth engine is losing steam.

The company has been here before. In 2022, a net decline of 200,000 subscribers in the first quarter, its first such drop in more than a decade, led to cuts of about 450 staffers. Smaller cutbacks followed in the years after, including several dozen members of its global product team earlier this year.

Now the streamer has gone much further. Netflix laid off around 1,000 employees on Wednesday, roughly 6% of its workforce, in what Variety described as its biggest cutbacks to date. The news was first reported by the Wall Street Journal.

According to a memo sent to staff Wednesday morning, most of the cuts will hit the product, technology, legal and human resources teams. Co-CEOs Ted Sarandos and Greg Peters wrote that delivering on the company’s mission to entertain the world requires being disciplined about where we prioritize our people and resources, according to a copy obtained by Variety.

Netflix had approximately 16,000 full-time employees at the end of 2025. Reports surfaced earlier this month that the company was planning a cut of about 5%, or roughly 800 workers, so the final number came in higher. Netflix has offered no comment beyond the staff email, and it remains unclear whether more layoffs could follow.

The layoffs come as the company faces pressure on several fronts. Investors have been concerned that engagement per user slowed in the first half of the year, and Netflix shares have fallen more than 40% over the past 12 months. Bloomberg also reported over the summer that the streamer’s biggest shows were losing more than half of their viewers after just one season.

The company hasn’t been standing still. It has added live programming channels, sports and events, video podcasts and content from YouTube personalities, and it has pursued bundling deals with other streaming services. Sarandos also acknowledged last month that growth is not as fast as he wants it to be.

Competition has intensified too. Netflix lost out to Paramount Skydance in the bidding for Warner Bros. Discovery’s streaming and studio assets earlier this year, and Paramount completed its $110 billion acquisition earlier this month. That deal has created a bigger rival in an already consolidated media market.

Despite the cuts, Netflix is trying to project confidence. Peters and Sarandos told employees that the streamer would keep investing aggressively in high-impact areas, according to the Journal, and that the company is on track to hit its earnings forecast. Their memo also urged staff to stay focused during one of the most dynamic times in the history of entertainment.

The timing is notable, since the cuts arrive about a week before Netflix reports its next quarterly earnings. The company still has the industry’s largest subscriber base at 325 million worldwide, and its customer defection rate in the US remains the lowest in streaming at just over 2%, according to Antenna data cited by the Journal. Netflix shares rose about 1% after the news broke.

For now, the cuts appear aimed at the people who build and support the platform rather than the shows themselves. Still, the long-term effects on its product development, technology plans and content strategy remain uncertain. Netflix hasn’t detailed how the reductions will break down across individual departments.

What is clear is that the streaming giant is trying to reset how it spends its money while its growth slows. The coming earnings report should show whether investors believe that strategy is working.

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