Netflix cuts 1,000 jobs – despite record profits
Netflix is the market leader and continues to rake in billions in profits. However, the audience is increasingly turning to platforms like YouTube and TikTok. The streaming provider aims to counter this with a change in strategy.
Streaming giant Netflix is tightening its belt: 1,000 employees have to go, which is about six percent of the workforce. Co-CEOs Ted Sarandos and Greg Peters informed their staff of this in an email on Wednesday. Several US media outlets have obtained copies of the email. You can read it, for example, in Variety magazine here. According to the report, employees in the product, technology, legal, and human resources departments are primarily affected.
With this, the streaming service is launching its largest round of layoffs to date. It even exceeds the mass layoffs in 2022, which occurred shortly after the first net decline in subscriber numbers in more than a decade.
So, is Netflix in crisis? No. The business model is strong and Netflix remains on track to meet its annual targets, Sarandos and Peters state in their memo. The company will continue to invest heavily and focus on growth. However, "targeted decisions" are necessary for this. Corporate speak, in other words.
Where does Netflix currently stand?
Netflix turned streaming into a successful model and continues to benefit from this pioneering role to this day. After the initial, explosive growth, which increased even further during the COVID-19 pandemic, the market has now reached a certain level of saturation. The entry of other services such as Disney+, Prime Video, and HBO Max is also challenging Netflix's market share. But so far, no one has been able to knock the market leader off its throne.
On the contrary: Netflix is earning more money than ever before. In the 2025 fiscal year, the company generated a profit of around 11 billion US dollars, an increase of 26 percent compared to the previous year. Annual revenue rose to around 45 billion US dollars. For the full year 2026, Netflix is even forecasting revenue of around 51 billion US dollars. According to Netflix, more than 97 billion hours of content were watched worldwide in the first half of 2026. Compared to the same period last year, this corresponds to an increase of two percent.
Nevertheless, Netflix has long been unable to show growth rates like in the past.
The concern about future growth could also be responsible for the weakening stock price. The value of Netflix shares has fallen by 40 percent since its all-time high in July 2025. Netflix has already pulled the obvious levers for higher profit through subscriptions in recent years, such as price increases and restricting account sharing.
Difficult growth in a constantly changing environment
The time when more content almost automatically led to strong growth seems to be over. Recent usage data also shows how difficult it has become to retain viewers for new series in the long term: even popular series often lose a large part of their audience after the first season. My colleague Luca analyzes the problem in more detail in his article.
In the fight for user attention, Netflix no longer just has to compete with other streaming services. Platforms like YouTube and TikTok are moving to the forefront. While viewers don't watch high-gloss series there, there is an almost unlimited amount of new and extremely diverse content every day. From short comedy sketches to gaming livestreams and podcasts to long-form analysis and reports from a wide variety of content creators, everything is included.
A broad program is therefore important for Netflix to be able to compete against YouTube, TikTok, and Instagram – platforms that often don't even have to pay for the content presented there. Netflix, on the other hand, produces elaborate shows like "Stranger Things" and "Squid Game" itself. That is time-consuming and expensive.
Broader offering against YouTube competition
The company is therefore experimenting with new content such as live sports broadcasts, gaming offerings, and the integration of linear TV programs. For example, users in France will soon be able to stream linear television channels and media library content from the French broadcaster TF1 on Netflix. All of this has the goal of keeping users on the platform for longer.
Meanwhile, the planned mega-deal for the acquisition of Warner Bros., including the prestigious HBO brand and the DC comic universe, fell through at the beginning of the year. However, it would have been so financially risky for Netflix that investors became nervous at the mere prospect of an acquisition: Netflix stock lost about a quarter of its value at one point and has not fully recovered from it to this day. In return, with Warner Bros.' extensive film and series rights, Netflix would have become the most powerful content provider in the world in one fell swoop.
Feels just as comfortable in front of a gaming PC as she does in a hammock in the garden. Likes the Roman Empire, container ships and science fiction books. Focuses mostly on unearthing news stories about IT and smart products.
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