Netflix is laying off approximately 1,000 employees. That represents around 6% of its global workforce and marks the company’s largest round of job cuts since 2022.
This is a little confusing to me, because according to Netflix, its business remains strong and continues to grow. And while this statement makes complete sense inside a corporate email, it makes less sense to the people being told they no longer have jobs. The bulk of the cuts will affect those working in product, technology, legal and human resources. Netflix co-CEOs Ted Sarandos and Greg Peters announced the decision in an internal message to staff. They said the company needs to make focused choices about where it places its employees and resources. Variety
At the end of last year, the company employed approximately 16,000 people. That is by no means a small number. So if you do the maths, almost one in every 16 Netflix employees will now leave the business. Quite an adjustment just a year later.
Netflix faces growing competition for our attention from the likes of Disney+, Prime Video and other streaming platforms. But television services are no longer its only concern. YouTube, TikTok, gaming and social media also want the hours we once spent deciding what to watch before giving up and returning to an old favourite.
The company has more than 325 million customers around the world and has reported growth in both revenue and profit. However, its share price has fallen by approximately 25% this year. But Netflix insists that it remains on track to meet its full-year financial forecast. Reuters. So this does not appear to be the story of a company running out of money. What it boils to is a successful company deciding that it can operate with fewer people. Which is not surprising since we’ve this pattern with other companies as well.
But when people think about Netflix, it’s not a standalone. They also think about actors, directors and whatever series everyone is discussing that week. And the simple truth is that streaming depends on thousands of employees viewers never see. When you break it down, it’s easy to see where each responsibility falls. Product teams build the features that help us find programmes. Technology employees keep the platform working across televisions, phones and consoles. Lawyers handle contracts, rights and regulatory matters. And at the end of the loop sit the human-resources teams. They deal with the people responsible for all of it. These are the jobs that help the service function.
You know, it is easy to hide the human reality of layoffs behind percentages. I mean, six percent sounds neat and manageable, right? But one thousand people? Now you start to see things a bit differently.
Each number represents somebody who woke up with a salary, responsibilities and a reasonable expectation that the company’s growth included them. But by the end of the day, that expectation flipped on its head.
Netflix is not the first to have done this, and it certainly won’t be the last. Entertainment and technology companies have spent the past few years cutting jobs while promising investors that they are becoming more efficient. “Efficiency” has become one of those wonderfully flexible corporate words. It can mean improving a process, reducing unnecessary spending or asking the remaining employees to do more work with fewer colleagues.
The layoffs are a clear demonstration of how much the streaming business has changed. It wasn’t too long ago when Netflix behaved like a company racing to grow. And the cost? Well… it did not matter at all. It spent heavily on programmes, expanded internationally and focused on gaining subscribers. Now it sits at the centre of the entertainment industry and must prove that growth can continue.
So now the cost comes into focus. Because in there efforts to prove that growth can continue, they will be under pressure to spend carefully, increase advertising revenue and keep viewers from cancelling their subscriptions. And yes, there will be presentations made by every department to justify its size. And I have to laugh, because the spreadsheets used to measure salary costs will definitely not be able to measure the experience and knowledge walking out the door.
We can only assume that there are sensible business reasons behind the restructuring. Companies change direction with developing technology. And as a result, priorities change where certain roles no longer fit the plan. But describing the business as strong while removing 1,000 jobs will understandably leave people asking who actually benefits from that strength.
I totally get that Investors may see lower costs and executives may see a more focused, streamlined company. But employees leaving Netflix will probably see something else entirely. For viewers, the service may look exactly the same tomorrow. The red logo will appear. New programmes will arrive, and the algorithm will continue recommending something we watched three years ago.
But behind that familiar screen, Netflix will have 1,000 fewer people helping to keep the entire operation running.
The company may call that focus, but for the people affected, it is a far more personal story.
