Netflix Is Cutting Jobs as YouTube Takes the TV
Netflix is reported to be preparing to cut about five percent of its staff, roughly 800 jobs, with its shares down about 20 percent this year. The company that taught a generation to stream is learning what every business learns eventually, which is that growth stops being automatic one day.
Netflix is reported to be preparing to cut about five percent of its staff, roughly 800 jobs, with its shares down about 20 percent this year. The company that taught a generation to stream is learning what every business learns eventually, which is that growth stops being automatic one day.
The company that changed how the world watches television is preparing to get smaller
On Friday, Puck reported that Netflix is preparing to cut about five percent of its workforce, and that an announcement could come as soon as next week. Netflix had roughly 16,000 full time employees at the end of last year, so a cut of that size would mean around 800 jobs. The company declined to comment, and it has not said which teams would be affected.
The timing is not subtle. Netflix reports its third quarter results on October 20, its shares are down about 20 percent this year, and its co chief executive, Ted Sarandos, said at a recent Bloomberg event that the business is not growing as fast as he wants. He also said it is growing fine. Both statements can be true, and the gap between them is where the cuts come from.
The Living Room Has a New Landlord
For most of the last decade Netflix was the default answer to the question of what to watch tonight. That is no longer the case. In Nielsen's measure of total television viewing in the United States earlier this year, YouTube accounted for 13.4 percent of all time spent watching a TV set, more than any other company, while Netflix accounted for 7.8 percent. YouTube's share rose a full point in a year.
The comparison matters because the two companies grow in very different ways. Netflix pays for almost everything it shows. Every new series is a bet made in advance with the company's own money, and the bet only pays if enough people subscribe and stay. YouTube pays for almost nothing up front. Millions of creators make the programming at their own risk, and the platform shares the advertising money with whoever finds an audience.
That difference shows up most clearly in the second and third seasons of a show, which is where Netflix has struggled to hold viewers this year. A hit gets people to sign up. Keeping them requires another hit, and another after that, and each one costs more than the last. A platform built on creators has the opposite problem. Its library refills itself every minute of every day.
Growth Is Turning Into Efficiency
Netflix is not in trouble in any ordinary sense. It is still profitable, still the largest subscription streaming service in the world and still expanding into advertising, live events and games. What has changed is the kind of company it needs to be. For years the job was to grow as fast as possible and worry about cost later. Now the job is to earn more from the people it already has, and that is a different organization with a different number of employees.
The rest of the industry is going through the same adjustment. Disney has made several rounds of cuts this year under its new chief executive, Josh D'Amaro. Media companies are consolidating, and the ones that remain are trying to spend less on content while charging more for it. The last time Netflix cut staff on this scale was 2022, when it lost subscribers for the first time in a decade and let several hundred people go. This round is happening while the company is still adding customers, which says more about expectations than about results.
There is a lesson in that for any business that has grown quickly. The habits that win a market are not the habits that keep it. Spending ahead of demand, hiring ahead of need and saying yes to every new idea make sense when every dollar brings back more than a dollar. When the returns flatten, those same habits become cost, and the companies that adjust early usually adjust on their own terms.
What It Means for Businesses Planning Their Next Year
The first lesson is about where attention now lives. The audience a business wants to reach is spending more of its evening with creators than with studios. For a brand that means the most valuable placements are increasingly the ones made by individuals, from reviewers and hosts to local personalities, rather than the polished productions that used to dominate the screen.
The second lesson is about cost. Netflix built its lead by paying for content no one else could afford. YouTube built a larger one by letting other people take the risk. A business that can turn its customers, partners and staff into the people who tell its story has a structural advantage over one that pays for every message itself.
The third lesson is about honesty with growth. A company that says it is growing fine while cutting five percent of its staff is telling two truths at once: it is still moving forward, and it is no longer moving the way it planned. Most businesses reach that moment eventually. The ones that admit it early, trim with care and invest in what is working come out the other side in better shape.
None of this means streaming is over or that Netflix has lost. It means the easy years are behind it, and the company that taught a generation to stream is now learning to run like a mature business. On October 20 investors will hear how it plans to do that. Everyone else can already see where the audience went.