Netflix cuts about 1000 jobs in largest round of layoffs since 2022
Key Facts
Netflix announced plans to cut about 1000 jobs, equivalent to roughly 6% of its workforce, as the company prepares to report quarterly financial results. According to Benzinga, the cuts announced on October 14, 2026 represent the company's largest round of layoffs since 2022. The reduction comes after the company's full-time workforce reached 16000 at the end of 2025, according to TechCrunch's reporting on its headcount. The round includes product and technology teams, as well as legal and human resources, according to Reuters' reporting on the cuts. The move thus affects employees developing the company's products and technology, as well as staff in its legal and human resources functions.
The co-chief executives linked the decision to reprioritizing staff and resources, according to Benzinga's account of management's explanation for the move affecting these teams. They described the approach as "prioritizing our people and resources," placing the allocation of staff and resources at the heart of the organizational changes announced within the company. On business performance, Sarandos acknowledged that the company was not growing as fast as he would like, according to Axios' reporting on his remarks. On its financial commitments, management said, according to Reuters, that it remained "on track to meet our full-year forecasts." Management's stated position combines an acknowledgment that business growth is slower than it had hoped with an assurance that it continues to work toward meeting its annual forecasts despite the job cuts.
Netflix reported revenue of about $12.6 billion in the second quarter of 2026, according to the company's shareholder letter covering that period's results. Its quarterly operating margin was 33.4%, compared with 34.1% in the second quarter of 2025, according to figures in the same letter. The operating margin was thus below its year-earlier level, while diluted earnings per share rose over the same quarterly period. Diluted earnings reached $0.80 per share in the second quarter of 2026, compared with $0.72 per share in the year-earlier period. The increase in this earnings measure coincided with a year-on-year decline in the operating margin in the quarterly results the company reported before the current round of layoffs.
For the full year, Netflix's guidance issued in July put expected 2026 revenue at $51.0–51.4 billion, according to the shareholder letter. That range was accompanied by a full-year operating margin target of 31.5%, as part of the financial guidance the company set for its business that year. In advertising, the company expected revenue to roughly double year on year to about $3 billion in 2026. Netflix described the expected increase in that business as "roughly doubling our advertising revenue," according to the wording in its shareholder letter. These advertising forecasts form part of the company's annual outlook, alongside the total revenue range and operating margin target announced in July.
In the market, Netflix shares rose 0.7% during trading on Wednesday, October 14, according to Reuters, coinciding with the announcement of the workforce reductions. The stock's gain during that session contrasted with a decline of nearly 25% from the start of 2026 through the announcement date, according to the comparison reported by the agency. In its quarterly outlook, the company had set an operating margin target of 33.2% for the third quarter of 2026, according to the shareholder letter. That target compares with an operating margin of 28.2% in the third quarter of 2025, the corresponding period Netflix used in presenting its guidance. The company is thus targeting a year-on-year increase in its third-quarter operating margin, after its second-quarter margin declined from the corresponding period.
Netflix is scheduled to publish its financial results for the third quarter of 2026 on Tuesday, October 20, according to an announcement from its investor relations department. The company set the release time at approximately 1:01 p.m. Pacific Time in its announcement of the reporting schedule for the period. The figures will be followed by a video interview with management, scheduled to begin at 1:45 p.m. Pacific Time the same day. Management will answer questions submitted by sell-side analysts during the interview, according to details the company announced for its quarterly results discussion. The release and analyst discussion follow the announcement of job cuts and management's confirmation that it remains on track to meet its full-year financial forecasts.