Global streaming platform Netflix is reportedly planning a new round of layoffs that could affect around 800 people. According to Reuters citing sources on October 9th, Netflix is planning to cut about 5% of its workforce, with the decision possibly being announced next week. However, Netflix has not responded to the layoff rumors, so it is currently unclear whether the company has finalized the scale of the layoffs and which business units will be impacted.
As of the end of last year, Netflix had approximately 16,000 full-time employees. If we calculate based on the reported 5% reduction, it would mean around 800 employees could face unemployment. Some media outlets have estimated that with a global workforce of around 17,000, the affected positions could be close to 850. However, this number is only an estimate based on the current workforce size and not an official list of layoffs or confirmed numbers released by the company.
Netflix underwent significant layoffs in 2022 when the company faced challenges such as slowing business growth and subscriber churn, adjusting its operations by cutting positions.
Compared to 2022, the background to the current layoff rumors is the escalating competition in the streaming media market. With continuous consolidation in the media industry, companies not only compete for paying subscribers but also have to adapt to changes in viewership habits and competition brought about by the reallocation of advertising budgets.
Reports indicate that despite Netflix’s overall strong financial performance in the past year, this round of personnel adjustments is mainly due to external competition and internal transformation pressure. Firstly, the streaming media market is intensifying. YouTube, owned by Alphabet, is capturing more viewership time and advertising spending, and traditional media outlets are also integrating to compete with Netflix.
Market analysts believe that Netflix’s layoffs may be a means to control costs and improve operational efficiency to help achieve the management-set target of a 31.5% full-year operating profit margin.
While Netflix has been actively expanding into advertising, live programs, and gaming in recent years to diversify revenue sources, it is uncertain whether these expanding new businesses will also be affected by the layoffs.