Netflix Plans to Lay Off About 5% of Employees
Puck News reported on Friday that Netflix is preparing to lay off about 5% of its employees, with the restructuring affecting this percentage, and the announcement could come as early as next week. The information comes from informed sources. A company spokesperson declined to comment on the report, and the affected departments were not named.
The number is an estimate, not a confirmed list from the company. Regulatory filings indicated that at the end of last year, there were about 16,000 full-time employees, with approximately 68% in the U.S. Variety reported that the combined total for the U.S. and Canada is about 10,900. Based on 16,000 employees, 5% would be about 800 people. Other reports calculated using the year-end figure of about 17,000 employees, resulting in approximately 850 people. Both estimates describe this round as the largest public layoff plan since 2022.
The last major layoff occurred in 2022, when about 450 positions were cut, following a net loss of 200,000 subscribers in the first quarter, marking the first decline in over a decade. Earlier in 2026, there were smaller cuts, with dozens of people leaving the global product team. Co-CEO Ted Sarandos mentioned last month at Bloomberg Screentime in Los Angeles that the company is still growing, with double-digit revenue in every region for the second quarter, but they want to grow faster.
The stock price is a source of pressure in this narrative. Bloomberg reported that since the company began pursuing Warner Bros. Discovery last year, the stock price has dropped about 42%, with investors viewing the large acquisition as a sign of weakness, as Netflix has historically made few large acquisitions. In the first quarter, net profit was $5.283 billion, an 83% year-on-year increase, which included a $2.8 billion breakup fee received after the termination of the acquisition agreement. Total debt at the end of the quarter was $14.4 billion, with cash and equivalents at $12.3 billion. The next quarterly report is scheduled for October 20.
On the competition side, media companies are merging, and YouTube is capturing more viewing time and advertising budgets. During the same period, Netflix has expanded its revenue beyond subscriptions, investing in advertising, live programming, and gaming. Puck did not specify which new business areas the 5% cuts would affect.
This is a cost message driven by events, not a confirmed layoff list. Selling pressure comes from shareholders interpreting the failed Warner deal and advertising share loss as signs of slowing growth, while buying logic comes from traders looking to exchange labor for profit margins. Beneficiaries would be those who view restructuring as a discipline on expenses, while the pressure is on the approximately 800 to 850 unnamed full-time positions and the ongoing investments in advertising, live programming, and gaming. The company has not yet confirmed this.
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Netflix's last acknowledgment of growth slowdown through layoffs was in 2022. That year, after losing 200,000 subscribers in the first quarter, Reed Hastings and Ted Sarandos cut about 450 jobs while adding advertising tiers and blocking password sharing. This time, the precursor event is not a negative subscriber trend but the failed bid for Warner Bros. Discovery. Of the $5.283 billion net profit in the first quarter, $2.8 billion was from the breakup fee after the terminated agreement, and with $12.3 billion in cash against $14.4 billion in total debt, the company does not face the same user shortfall as in 2022.
The direction of job cuts and revenue generation is misaligned. Subscriptions remain the core, while growth is being funneled into advertising, live programming, and gaming to compete with YouTube for viewing time and ad budgets. The 5% reduction does not specify departments; historically, 2022 cuts affected content, marketing, and animation, while earlier this year, dozens from the global product team were cut first. If confirmed next week, the savings will come from salaries, not content budgets.
In comparison, during the same period in 2022, Disney cited streaming losses as a reason for layoffs, and after Paramount merged with Warner, high-level executives left. The difference is that Netflix does not have a failed library to consolidate; it is paying for the acquisition premium that did not materialize, and its stock has already dropped 42%. The industry position is in a control phase: user growth can no longer solely support valuation, and staffing is starting to be viewed as an adjustable expense.
The essence is a shift in pricing power. After streaming took the price power of home viewing from cable channels, advertising and viewing time pricing power is being taken by YouTube and short videos. The mechanism is that the failed acquisition of Warner did not secure library barriers, and the breakup fee only patched one quarter's profit; the market demands sustained operational leverage. Cutting 5% is exchanging the scale that was not acquired for visible cost reductions.