Netflix implemented a round of layoffs on Wednesday, the 14th, affecting approximately one thousand employees, which corresponds to 6% of its global workforce. This represents the largest cut made by the company since 2022, occurring in a context of slowing growth and increasing investor pressure on the platform's performance.
In an internal communication, co-CEOs Ted Sarandos and Greg Peters announced that most of the personnel reductions will be concentrated in the product, technology, legal, and human resources departments.
Netflix's shares have fallen by over 40% over the last twelve months. One concern raised is public engagement, which registered a modest increase of only 2% during the first half of this year, according to Deadline.
Additionally, the platform has faced challenges in producing series that achieve the same level of cultural impact as hits like Stranger Things, Round 6, and Wednesday. Productions that returned with new seasons showed a decline in viewership compared to previous periods.
A memo obtained by Deadline revealed that executives acknowledged the impact of these layoffs and emphasized the support offered to professionals leaving the company. They stated: 'Decisions like these are never easy, and we do not make them lightly. Our main priority today is to support those who are leaving Netflix.'
The failed attempt to acquire Warner Bros.' studio and streaming assets also generated doubts among investors regarding the company's expansion plans. However, executives refute the need for a major acquisition to ensure sustained growth.
During a conference held by Bloomberg earlier this month, Sarandos admitted that the pace of expansion is below his expectations. He stated: 'Overall, we are not growing as fast as I would like, and we are working to accelerate that pace.'
In this scenario, Netflix has adopted a strategy of diversifying its catalog to motivate subscribers to stay on the platform longer. This approach includes initiatives that go beyond traditional series and film formats.
Despite the cuts, the company maintains competitive advantages in the fight for subscribers. According to the analysis firm Antenna, the cancellation rate in the United States is slightly above 2%. The layoff announcements occurred one week before the next quarterly earnings release. In communication to employees, Sarandos and Peters assured that Netflix will continue to invest in sectors of greater relevance and will proceed according to its full-year earnings projection.
