Netflix to Cut 6% of Workforce, About 1,000 Jobs, in Broad Organizational Shift
Key Facts
Netflix plans to cut about 6% of its workforce, or roughly 1,000 jobs, as part of broader organizational changes, The Associated Press reported, citing the company. The announcement came on October 14, before third-quarter results were released on October 20, contrary to the initial version of the story. The company said product, technology, legal and human resources teams would be most affected by the cuts. Management described the approach as requiring "discipline in determining the areas where we prioritize our people and resources." The company did not directly link the decision to slowing revenue or a restructuring of its programming unit.
Netflix had about 16,000 full-time employees worldwide at the end of 2025, according to regulatory filings cited by The Associated Press. That puts the announced cuts in the context of a large global workforce, while the final number of affected jobs remains described as about 1,000. This is the company's biggest round of layoffs since 2022, when it cut about 450 jobs in two rounds. Those cuts came after the company lost subscribers for the first time in more than a decade, according to a Reuters report. The current announcement, by contrast, was framed by the company as a broader organizational shift and identified the teams most affected without limiting the decision to any one business.
Third-quarter results showed operating margin improving to 34.6%, from 28.2% in the same period of 2025, according to Netflix's shareholder letter. The company said the margin exceeded its forecast mainly because of the timing of expenses. Net income was 3.664 billion dollars, compared with 2.547 billion dollars a year earlier, while diluted earnings per share rose to 0.87 dollars from 0.59 dollars. The company attributed quarterly revenue growth to subscriptions, with more memberships and higher prices, as well as advertising growth and a positive foreign-exchange impact after hedging. The results came after the cuts were announced, but do not establish that the decision was made to address slowing revenue growth or improve margins over the long term.
Netflix forecast fourth-quarter revenue of 13.442 billion dollars, equivalent to expected annual growth of 11.5%. But the company lowered its estimate for 2026 advertising revenue to about 2.7 billion dollars, from about 3 billion dollars previously, citing a slight delay in rolling out some advertising product capabilities. It said the job cuts would negatively affect expected fourth-quarter operating margin by about 120 basis points. The negative impact included in its 2026 operating margin guidance is about 30 basis points. These figures show that the cuts are factored into future margin calculations, while revenue and advertising forecasts cover two different time horizons.
On content leadership, Netflix announced that Peter Rice will become chief content officer effective October 26, succeeding Bela Bajaria, who is leaving the company after about 10 years. The leadership change coincides with cuts affecting product, technology, legal and human resources teams, according to the company announcement, but that does not establish a direct connection between the two. The fourth-quarter content slate includes new seasons of "The Diplomat," "Nobody Wants This" and "Lupin," as well as the finale of "Emily in Paris." It also includes 3 NFL games, one on Thanksgiving Eve and another on Christmas Day, according to the shareholder letter. In the market, the stock fell 4.1% to 65.90 dollars in after-hours trading following the results announcement on October 20, while it was up 0.7% during the trading session on October 14, when the layoffs were announced, despite being down about 25% since the start of the year through that date.