Netflix is cutting about 1,000 jobs, or 6% of its global workforce, as growth slows and concerns rise over subscriber engagement and competition.
The cuts will mainly affect the product, technology, legal and human-resources teams. Co-chief executive officers Greg Peters and Ted Sarandos announced the decision in an email to employees on Wednesday, according to Bloomberg.
“Decisions like these are never easy, and we don’t take them lightly,” the executives wrote.
They added that Netflix’s business is “strong and growing, and we remain on track to deliver our full-year forecast.”
Netflix faces growth concerns
The job cuts come as investors grow concerned about Netflix’s growth prospects. Its shares fell less than 1% on Wednesday morning in New York. The stock has lost 25% this year, while the S&P 500 has gained 13%.
Earlier this year, Netflix lost a bid to acquire Warner Bros. Discovery Inc. Investors viewed the move as a possible sign of weakness. The deal would have given Netflix access to the Hollywood studio’s library of established characters and stories.
Analysts have also raised concerns about the lack of new blockbuster titles on the platform. They fear this could make it harder for Netflix to retain viewers.
Subscriber engagement grew by just 2% in the latest period. The company also recorded its fewest Emmy Award wins in a decade.
Streaming competition intensifies
Netflix has been seeking ways to keep its 325 million subscribers watching for longer. It also wants to increase advertising revenue as growth slows.
The company has expanded into live sports and events, video podcasts and programmes featuring some of YouTube’s biggest creators. These moves have intensified competition for viewers and talent.
Netflix has also struggled to keep audiences watching shows beyond their first season.
Speaking at the Bloomberg Screentime conference recently, Sarandos acknowledged that Netflix “wasn’t growing as fast as I want” and said, “we’re working on making that move faster.”
Company plans further investment
Despite the planned layoffs, Netflix says it will continue to invest in areas that support growth and innovation.
In the memo, the executives said Netflix would “invest aggressively in high-impact areas to improve our service and further drive growth and innovation. Doing that means making focused choices across the business.”
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