Netflix to cut about 1,000 jobs and appoint Peter Rice as head of content
Key Facts
Netflix plans to cut about 6% of its workforce, or nearly 1,000 jobs, as part of organizational changes the company said will affect its product, technology, legal and human resources teams. The cuts coincide with a change in content leadership, with Peter Rice succeeding Bela Bajaria and beginning to oversee content strategy on October 26, 2026. The Associated Press reported that the co-chief executives said the company needed “discipline in prioritizing employees and resources.” The same week, co-CEO Ted Sarandos said Netflix saw an opportunity to raise the level of its content slate, adding: “I know we can do better.” The job cuts and leadership change come as part of a broader review of priorities, while the impact of the cuts will be reflected in the fourth-quarter operating margin.
Netflix had about 16,000 full-time employees worldwide at the end of 2025, according to regulatory filings cited by The Associated Press. The announced reduction amounts to about 6% of the workforce, or nearly 1,000 jobs, according to the company. The teams most affected are product, technology, legal and human resources, according to the company statement cited by the news agency. At the same time, other content executives are leaving as Rice is appointed the division’s new head. Rice will also temporarily oversee the film division until a successor to Jin is chosen, according to Reuters.
The moves followed Netflix’s report of third-quarter 2026 revenue of $12.874 billion, up 11.8% from $11.510 billion in the same period of 2025. Reuters reported that this was the slowest pace of revenue growth in about three years, though it was in line with Wall Street expectations. Operating margin was 34.6%, compared with 28.2% a year earlier. The company said the margin exceeded its expectations mainly because of the timing of expenses. It attributed revenue growth mainly to subscriptions, with membership and prices increasing, alongside growth in advertising and a positive foreign-exchange impact. It also said cancellations improved year over year globally and in the United States, and came in better than expected in the third quarter.
The third-quarter results presented a picture of improving margins alongside slower revenue growth, while Netflix said job cuts would affect its calculations for the coming period. The company expects fourth-quarter 2026 revenue of $13.4 billion and an operating margin of 26.0%. The margin forecast includes a negative impact of about 120 basis points related to the recently announced staff cuts. For 2026, Netflix expects revenue of $51.1 billion and an operating margin of 31.5%. Sarandos said the company saw an opportunity “to take its content slate to the next level,” as Rice assumes responsibility for content strategy and temporarily oversees the film division.
The content leadership change comes as Netflix competes for viewing time with platforms offering free, user-generated content. Reuters noted that YouTube and TikTok attract viewers with this content, giving them a cost advantage over Netflix’s productions. In a report on the internal changes, the Los Angeles Times cited former employees and insiders describing disagreements between the content and technology divisions; that account was not attributed to an official company statement. After the results were announced on October 20, Netflix shares fell about 6% in after-hours trading to $64.66, according to Reuters. The Associated Press attributed the decline to the company lowering its advertising sales forecast and investor concerns about slower revenue growth. The news agency added that one analyst saw a change in content strategy alone as insufficient to address this challenge.
Reuters reported, citing London Stock Exchange Group data, that more than 20 brokerages cut their price targets for the stock after the results. In the October 26 session, Netflix shares closed at $63.9, according to EL7 data. Fourth-quarter and 2026 forecasts remain an indicator of the figures management is targeting after announcing the cuts and redistributing content responsibilities. The fourth-quarter forecast includes a negative impact of about 120 basis points from the job cuts, according to the shareholder letter. Rice began overseeing content strategy on October 26 and will temporarily lead the film division until a new head is appointed.