• Netflix (NFLX) is preparing to cut approximately 1,000 jobs, or 6% of staff, according to a Wall Street Journal (NWSA) report—its largest workforce reduction since 2022.
  • The cuts, which could be announced this week, are expected to affect creative employees, including those working on features, as management seeks to rein in costs and reignite growth.
  • Third-quarter earnings on October 20 will be the next major opportunity for co-CEOs Ted Sarandos and Greg Peters to clarify the restructuring, potential charges, and savings.

Cost Discipline Meets Slower Growth

Netflix is poised to trim roughly 6% of its workforce—about 1,000 jobs—in what would be its largest round of layoffs since 2022, according to people familiar with the matter. The Wall Street Journal reported the figure, which is above earlier estimates of around 800 positions circulated by several outlets on October 9. The company declined to comment.

The cuts, which could be announced as soon as this week, are expected to hit creative teams, including staff working on feature films, according to the Los Angeles Times. A complete breakdown by division, geography, or seniority has not been verified. Netflix had approximately 16,000 full-time employees at the end of 2025, with roughly 68% based in the U.S. and Canada. The reported figure of 1,000 jobs is roughly 6% of that headcount, though the current denominator may have shifted.

The restructuring comes as Netflix faces mounting pressure to improve growth and control expenses. While revenue continues to expand—second-quarter revenue rose 13.4% year over year to $12.56 billion—non-content operating expenses climbed 18% in the same period, outpacing top-line growth. Operating margin dipped to 33.4% from 34.1% a year earlier.

“Overall we’re not growing as fast as I want us to,” co-CEO Ted Sarandos recently acknowledged, underscoring the challenge facing the streaming giant.

The Engagement Puzzle

The layoffs are unfolding against a backdrop of intensifying competition for audience attention. Netflix’s viewing hours increased just 2% in the first half of 2026 despite rising content spending. Meanwhile, YouTube (GOOGL) captured 14.2% of U.S. television viewing in July, according to Nielsen (NLSN), compared with Netflix’s 7.8%.

Netflix argues that watch time alone doesn’t capture the value of certain investments, particularly live programming, which can drive subscription sign-ups even if it accounts for a smaller share of total viewing. But the debate over whether engagement weakness signals deteriorating value or a shifting programming mix remains unresolved.

Analysts are divided on the outlook. KeyBanc (KEY) lowered its Netflix price target to $85 from $92 on October 13, citing foreign-exchange headwinds and more modest margin expansion, while maintaining an Overweight rating. Huber Research downgraded the stock from Buy to Sell, pointing to slower engagement and limited room for further U.S. price increases.

Restructuring Already Underway

The planned cuts are not Netflix’s first move to streamline operations this year. The company made smaller reductions to its global product team earlier in 2026 and, in August, closed its Hollywood-based Night School gaming studio while moving to shutter Helsinki-based Moonloot.

The current situation differs markedly from 2022, when Netflix’s first subscriber decline in more than a decade preceded about 450 layoffs over two months. Today, the company is still posting double-digit revenue growth and substantial profits—second-quarter net income reached approximately $3.4 billion—and has approximately 325 million paid memberships worldwide. The pressure now is about the pace and efficiency of growth rather than a subscriber-loss shock.

Parallel industry developments underscore the broader cost-cutting trend. Paramount Skydance (SKYD)’s combination with Warner Bros. Discovery (WBD) closed in early October, with leaders warning employees that layoffs would form part of a program targeting more than $6 billion in annualized savings over three years. Disney (DIS) also cut 300 jobs and offered executive early-retirement packages on October 2.

What to Watch

All eyes are on Netflix’s third-quarter earnings, scheduled for October 20 after market close. That will be the next major opportunity for management to clarify the restructuring, including the confirmed number of positions, affected functions, restructuring charges, and expected savings. Until then, a reliable estimate of the financial impact is not possible.

The longer-term question is whether Netflix can turn advertising—expected to generate approximately $3 billion in 2026 revenue, roughly double the prior year—and live programming into durable growth while operating with a leaner workforce. Cost reductions can improve efficiency, but as the competing analyst assessments make clear, they do not by themselves resolve the underlying growth question.

Netflix did not respond to requests for comment.

Correction: An earlier version of this article misstated the timing of Netflix's 2022 layoffs. The cuts occurred over May and June of that year, not over a single quarter.