Netflix is cutting approximately 1,000 jobs, or 6% of its workforce, in its largest round of layoffs since 2022, as the streaming giant faces intensifying competition for viewers and growing concerns over its ability to sustain long-term growth.

The cuts will primarily affect the company's product, technology, legal, and human resources departments, according to an internal memo sent to employees on Wednesday by Co-CEOs Greg Peters and Ted Sarandos, first published by the Wall Street Journal and reviewed by Reuters.

"Our mission — to entertain the world — is ambitious, and delivering on it requires us to be disciplined about where we prioritize our people and resources," the executives said in the memo.

"Our business is strong and growing, and we remain on track to deliver our full-year forecast."

Netflix shares, which have fallen around 25% so far this year, rose 0.7% on Wednesday. The company had approximately 16,000 employees at the end of last year.

Netflix layoffs reflect mounting pressure on growth

The job cuts come as Netflix faces questions over whether it can sustain the growth that has reshaped the US media industry and challenged traditional cable television businesses.

Investor concerns increasingly center on engagement, measured by the amount of time users spend on the platform. YouTube and TikTok have intensified competition by attracting viewers with free, user-generated content, giving them a cost advantage over subscription-based streaming services.

Netflix's unsuccessful pursuit of Warner Bros Discovery's streaming and studio assets earlier this year also raised questions about its strategic direction. Paramount completed its $110-billion acquisition of Warner Bros earlier this month, forming Skydance.

Ross Benes, a senior analyst at eMarketer, said Netflix had struggled to establish another major source of revenue beyond its core subscription business.

"They haven't been able to find like another line of major revenue," Benes said, adding that the company remained reliant on subscriptions that could be approaching a ceiling.

"Eventually, because they've kind of nearing a ceiling with that, they'll need another revenue stream to diversify, and that's where it's been more of a struggle."

Netflix has been working to diversify its revenue streams beyond subscriptions through investments in advertising, live programming, and gaming.

The latest Netflix layoffs mark its largest workforce reduction since 2022, when the company eliminated approximately 450 jobs across two rounds of cuts after losing subscribers for the first time in more than a decade.

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