Netflix is cutting approximately 1,000 jobs, about six percent of its roughly 16,000-person workforce, in the largest round of layoffs in the company’s history. The previous record was 450 positions eliminated in 2022.
In a company-wide memo, co-CEOs Ted Sarandos and Greg Peters told staff the cuts would hit product, tech, legal, and HR teams hardest. “We wanted to share that we are making a number of organizational changes and, as a result, we’ll be letting go of roughly 6% of our colleagues, with the greatest impact to our product, tech, legal, and HR teams,” the memo read.
“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 layoffs come as Netflix’s stock has fallen sharply over the past year, down 42 percent from $121.00 to $70.30. Analysts attribute much of the decline to the belief that subscriber growth for streaming services has leveled off. Unlike larger entertainment conglomerates with revenue from theme parks, merchandising, and broadcast or cable television, Netflix relies almost entirely on subscriptions and advertising-tier revenue.
Netflix remains highly profitable, but with limited room to expand its subscriber base further, the company appears to be turning to cost-cutting — including increased use of artificial intelligence — to shore up profit margins and investor confidence.
Netflix is not alone in this shift. Grocery chain Kroger announced it will lay off 3,000 corporate employees over the next three years as it expands its use of AI to streamline operations. In a memo to staff, Kroger CEO Greg Foran wrote, “Technology is reshaping what’s possible. The way work gets done is changing across every industry; we must adapt and take advantage of technology. We need to adopt capabilities, reduce duplicative work and look closely at where work is best fit to be done.”
Both companies’ moves point to a broader trend of corporations across industries turning to automation and AI-driven efficiency as a means of boosting profitability in the absence of significant growth in their customer bases.
