Netflix (NFLX.US) lays off 1,000 employees, stock price drops over 40%: Growth anxiety or a bottom signal?

According to Woofun AI, Netflix (NFLX.US) abruptly announced the layoff of approximately 1,000 employees—about 6% of its total workforce—just six days before its quarterly financial report. This largest organizational adjustment since 2022 was led by co-CEOs Greg Peters and Ted Sarandos, aiming to prudently allocate personnel and resources in response to current market pressures.

The layoffs mainly affect product, technology, legal, and human resources departments. Greg Peters and Ted Sarandos emphasized the necessity of this move in an internal memo released via TheWrap. Although the company’s fundamentals remain solid—Woofun AI's compiled data shows that Netflix (NFLX.US) is expected to reach revenues of $51 billion to $51.4 billion in 2026, generating an operating profit of 31.5 cents per $1 revenue—its growth momentum has clearly weakened. In the first half of 2026, member viewing hours increased by just 2%, while in July, YouTube accounted for 14.2% of TV viewership in the US, significantly surpassing Netflix (NFLX.US)'s 7.8%. Over the past year, $NFLX's share price has fallen by about 41%, with the market deeply concerned about decreasing user engagement and intensifying competition.

Looking back, on May 11, 2022, Netflix (NFLX.US)'s share price dropped to a post-split low of $16.64, after which about 150 and 300 positions were cut on May 17 and June 23, respectively. By the end of 2022, the share price rebounded 77% from the low, but analysis by The Motley Fool pointed out that this rebound was mainly driven by cheaper ad-supported plans and the crackdown on password sharing, rather than the layoffs themselves. In the current predicament, Netflix (NFLX.US) is trying to optimize its structure through cost cutting, but with stagnant user viewing time and the strong rise of YouTube, reducing headcount alone is unlikely to immediately shift market sentiment.

Looking ahead, on October 2, BeInCrypto analysis suggested that Netflix (NFLX.US) stock may show signs of a rebound near $68, while on Wednesday, it traded at about $71. As the October 20 earnings report release approaches, the market’s focus will be on its third-quarter revenue expectation of $12.86 billion and earnings per share of $0.82. If the results meet expectations, it may ease concerns about slowing growth; otherwise, the stock price could remain under pressure.