Netflix (NFLX) is reportedly preparing to cut around 5% of its workforce, with an announcement potentially coming as early as next week, according to a report from Puck.
The streaming giant employed roughly 16,000 full-time workers at the end of 2025, meaning the proposed cuts would eliminate approximately 800 jobs.
That figure would surpass the roughly 450 positions Netflix eliminated across two rounds of layoffs in 2022, which marked the company’s last significant workforce reduction.
Notably, the first round of those 2022 cuts came just four trading days after Netflix stock hit its lowest closing price during that downturn.
Netflix shares currently trade around $71, approximately four times the 2022 low but still 47% below the record closing price of $133.91 set in June 2025.
Netflix declined to comment on the reported restructuring, meaning the planned cuts remain unconfirmed at this stage.
A key driver behind the potential move is the widening gap between the company’s spending growth and its revenue growth across recent quarters.
Netflix’s sales and marketing, technology and development, and general and administrative expenses rose a combined 18% year over year in the second quarter of 2026, totaling around $2.3 billion.
Revenue growth, by comparison, reached only 13% during the same period, with total second-quarter revenue coming in at $12.56 billion.
Technology and development costs alone jumped 22% year over year, with Netflix attributing much of that increase to a $142 million rise in personnel-related expenses.
The revenue growth trajectory has also been cooling steadily, falling from 18% in the fourth quarter of 2025 to 16% in the first quarter of 2026 and then to 13% in the second quarter.
Netflix posted net income of $3.4 billion for the second quarter of 2026, alongside an operating margin of 33.4%, results that still sent the stock down more than 8% in after-hours trading.
Management has set a full-year 2026 operating margin target of 31.5%, and any confirmed workforce reductions could contribute to meeting that goal.
The company also narrowed its full-year 2026 revenue forecast to a range of $51 billion to $51.4 billion and expects advertising revenue to reach approximately $3 billion for the year.
Full-time headcount at Netflix grew 25% between the end of 2022 and the end of 2025, rising from roughly 12,800 to 16,000 employees, making the reported cuts a significant reversal of that trend.
Netflix operates in an increasingly competitive streaming environment, with media companies consolidating and YouTube continuing to capture a growing share of viewers and advertising dollars.
The company has been broadening its business model by investing in advertising, live programming, and gaming in an effort to reduce reliance on subscription revenue alone.
At current prices, Netflix shares trade at roughly 19 times earnings based on analysts’ average estimates for 2027 profits.
