• Netflix (NFLX) is reportedly planning to lay off approximately 800 employees—about 5% of its workforce—marking its largest reduction since 2022.
  • The cuts, which may affect creative teams, come as Netflix shares have fallen roughly 43% year over year amid slowing growth and investor concern about engagement.
  • With earnings due on October 20, the company maintains its full-year revenue outlook but faces heightened pressure to demonstrate that its advertising and international strategies can reignite momentum.

Netflix ($NFLX) is preparing to cut about 800 jobs, or roughly 5% of its workforce, according to people familiar with the matter, in what would be the streaming giant’s largest round of layoffs since 2022. The plan, first reported by Reuters (TRI) on October 9 and independently corroborated by the Los Angeles Times, could affect creative teams, including feature-film staff, though Netflix has not confirmed the final number, timing, or organizational details.

The news comes just days before Netflix’s third-quarter earnings report on October 20, a key checkpoint for investors who have punished the stock. Shares are down approximately 43% over the past year as of October 9, reflecting worries that growth is decelerating. Netflix declined to comment on the layoffs.

Growth Still Positive, but Slowing

The layoffs are not a response to shrinking revenue. Netflix remains profitable and growing: second-quarter revenue rose 13.4% year over year to $12.56 billion, though that marked a slowdown from 16.2% growth in the first quarter. Earnings per share came in at $0.80, topping analyst expectations of $0.79.

What’s troubling investors is the pace of engagement. First-half viewing hours increased just 2%, which Netflix described as healthy but critics see as modest relative to its hefty content investments. Meanwhile, YouTube (GOOGL) accounted for 14.2% of U.S. television viewing in July, compared with Netflix’s 7.8%, according to Nielsen data cited by the Los Angeles Times—a reminder that competition now revolves around attention, not just subscriptions.

The company’s third-quarter outlook, issued in July, calls for revenue of $12.86 billion and diluted EPS of $0.82, both slightly below LSEG (LSEG.L) analyst expectations of $13 billion and $0.84. For the full year, Netflix narrowed its revenue guidance to $51.0–$51.4 billion from $50.7–$51.7 billion, maintaining a 31.5% operating margin target. Advertising revenue is projected at approximately $3 billion in 2026.

“Weaker engagement” should be understood as concern about limited engagement growth rather than an actual decline in total viewing. International markets are driving more of the growth: in the second quarter, U.S. and Canada revenue rose 10%, while Europe, the Middle East, and Africa grew 14%, Latin America 21%, and Asia-Pacific 16%. About 57% of revenue now comes from outside the U.S. and Canada.

Precedent and Parallels

The closest historical parallel is 2022, when Netflix lost 200,000 subscribers in the first quarter—its first decline in over a decade—and cut approximately 150 employees in May, followed by 300 in June. Management at the time said it was aligning costs with slower revenue growth. This time, revenue and viewing are still increasing, but investors are questioning the durability of that growth.

Other entertainment firms are also tightening belts. Disney (DIS) laid off nearly 300 employees around the beginning of October, largely in human resources and technology. Netflix itself has already retrenched in gaming, closing its Hollywood-based Night School studio in August and initiating the closure of Helsinki-based Moonloot.

Analysts remain divided on the implications. PP Foresight analyst Paolo Pescatore characterized the disappointing third-quarter forecast as reflecting a maturing growth profile and management caution, rather than sudden deterioration. “Netflix remains strong but is entering a steadier phase with less room for error against high expectations,” he said.

Regulatory pressures add another layer. European rules require on-demand services to maintain at least 30% European works in their catalogs, and France mandates that subscription streamers invest 20% of local revenue in French and European films and series. In July, Netflix France content chief Pauline Dauvin criticized expanded genre-specific obligations, arguing they could weaken editorial freedom and make financing harder to sustain.

Netflix stopped publishing quarterly subscriber counts in 2025 and plans to reduce viewing-hours reports from twice yearly to annually beginning in January 2027—a move that may further obscure the engagement picture.

For now, all eyes are on the October 20 earnings report. It could clarify the restructuring’s scope, any associated charges, and whether management still expects to hit its full-year targets. Until then, projected cost savings remain speculative: Netflix has not publicly quantified the plan.

Correction: October 14, 2026 — An earlier version of this article stated that Netflix was cutting 1,000 jobs (6% of its workforce). The reported figure is approximately 800 employees, or 5%, based on the most recent reporting.