Netflix fires 1,000 staff as viewer engagement growth stalls

Summary

• Netflix dismissed about 1,000 employees, roughly 6% of staff, including its content and film chiefs.
• Viewing time grew just 2% in the first half of 2026 despite roughly $20bn in annual programming spend.
• The company has shed about $300bn in market value since its 2025 peak.

The latest

Netflix has lost roughly $300bn in market value since last year's peak after a week in which co-chief executive Ted Sarandos fired about 1,000 employees and removed the executives running its television and film slates, the Financial Times reported. Shares fell nearly 6% on Tuesday as the company reported slowing revenue growth and warned sales growth would decelerate further.

Details

• The internal trigger: At an annual review this spring, senior executives found that qualified play days — Netflix's internal measure of how often subscribers log on — were sliding, according to an employee briefed on the meeting. The same person said the mood shifted quickly, with teams bracing for job cuts.
• The cuts: Netflix dismissed about 6% of its workforce, or roughly 1,000 employees, last week. Sarandos told staff the move was necessary to invest in high-impact areas. Chief content officer Bela Bajaria was dismissed hours after helping oversee the lay-offs, and film chief Dan Lin was also removed.
• The numbers: Despite spending roughly $20bn a year on programming, total time spent watching Netflix grew just 2% in the first half of 2026. Revenue growth currently sits at 11.8%, and the company warned on Tuesday that growth would slow to levels last seen in 2023.
• Disputed data: Analytics firm Antenna found Netflix added no net new US subscribers in any month during the first nine months of the year. A Netflix spokesperson said Antenna's methodologies were not representative of its business performance and that its conclusions were inaccurate.
• Sarandos's defence: On a call with analysts, Sarandos insisted the underlying business was sound and no fundamental shift in strategy was needed, while conceding the company needed better execution in the United States, where growth was slower than he would like.
• Internal criticism: A longtime Hollywood executive said Sarandos would never admit the mistake was his, so others would take the fall. Executives and industry insiders said Sarandos was the architect of the strategy Bajaria carried out: broadening mass appeal and driving growth outside a saturated US market.
• The creative squeeze: One recently dismissed employee said creative executives faced competing pressures to deliver bigger hits while cutting costs, expected to give top showrunners the "razzle dazzle treatment" on much tighter budgets. The same person said the shift toward commercial safety cost Netflix an answer to HBO's White Lotus.
• The new content chief: Peter Rice, a Disney and Fox veteran with deep Hollywood relationships, takes over the content role. Sarandos told investors that understanding talent relations would be among Rice's biggest priorities, and said the company's theatrical strategy had evolved.
• The scale that remains: Netflix ended 2025 with 325mn paying subscribers, the largest paid streaming platform in the world, and posted $11bn in net income on $45bn in revenue last year. Antenna data shows its cancellation rate is the lowest in the industry.
• Analyst framing: Rich Greenfield of LightShed Partners called Netflix a show-me story that must prove revenue growth can reaccelerate. He judged a return toward mid-teens growth in 2027 would make this a narrative problem, while deceleration toward 10% or below would signal a real one.

Background

Netflix's shares have more than halved from their 2025 high, with the sell-off accelerating after its failed bid for Warner Bros Discovery raised questions about whether it holds enough content to sustain momentum alone.

Between the lines

Bajaria's dismissal raises a question the firings do not answer: if Sarandos set the mass-appeal, international-growth strategy she executed, replacing the executives who delivered it may not revive the company's fortunes. Greenfield noted entertainment is unpredictable, citing surprise hits such as Squid Game, and that a stronger slate next year could reset perceptions even though it was commissioned by the executives just fired.

What's next

Watch 2027 revenue growth against the 11.8% current rate, Rice's first slate decisions, the theatrical release of Greta Gerwig's Narnia next year, and audience response to new seasons of The Diplomat and Wednesday.

Source: Financial Times