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"Decisions like these are never easy, and we don’t take them
lightly," Peters and Sarandos wrote in the memo, which was
obtained by The Associated Press. They maintained business was
strong — but that Netflix needed to be “disciplined about where
we prioritize our people and resources" as it invests in future
growth and “high impact areas to improve our service.”
Beyond the memo from its chief executives, Netflix declined to
comment further about Wednesday's cuts.
Between membership signups and price increases, Netflix’s profit
has grown this year. In its second financial quarter, the
company earned $3.4 billion and racked up revenue of $12.56
billion — up 9% and 13%, respectively, from the same period last
year.
Still, Netflix’s forecast for the third quarter fell below Wall
Street's expectations. The company plans to report those
earnings next week.
Competition in the streaming space is growing more crowded
overall. Netflix continues to be a dominant player (accounting
for 19% of the market per the latest data from streaming guide
JustWatch), but rivals like Amazon's Prime Video and Disney+ are
close behind.
HBO Max and Paramount+ are also now under the same roof —
Skydance — after Paramount's $81 billion buyout of Warner Bros.
Discovery closed last week. The new Hollywood giant plans to
unify its streaming products “into a single service over time.”
Netflix initially inked a deal to buy Warner's studio and
streaming business late last year, but walked away from that
offer back in February.
At the end of 2025, per regulatory filings, Netflix had about
16,000 full-time employees worldwide. The layoffs announced
Wednesday mark the biggest round of cuts the California-based
company has rolled out in years.
The Wall Street Journal first reported Wednesday's news of the
layoffs.
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