Netflix announced it will reduce its workforce by approximately 1,000 employees, representing about 6% of its total staff. The layoffs will mainly affect the product, technology, legal, and human resources divisions, as disclosed in an internal memo obtained by CNBC. Co-CEOs Ted Sarandos and Greg Peters emphasized that while Netflix’s business is strong and growing, the company must make strategic choices to focus its resources on key areas that will drive growth, innovation, and improved service for its users.

This workforce reduction comes shortly before Netflix is set to release its quarterly earnings on October 20. The cutbacks also follow remarks made by Sarandos at the Bloomberg Screentime conference earlier in October, where he admitted the streaming giant was “not growing as fast as I want.” Although Netflix remains the leading platform in the streaming industry and continues to be profitable, it has faced challenges such as stagnating viewing times and relies heavily on measures like cracking down on password sharing and introducing a lower-cost, ad-supported subscription tier to attract new subscribers.

Netflix’s current competitive landscape involves facing threats from platforms like YouTube, as well as upcoming moves from Skydance, a combined entity of Paramount and Warner Bros. Discovery planning to merge Paramount+ and HBO Max services. The company has been diversifying content by including live sports, documentaries, and video games, aiming to capture a broader audience’s attention. However, it has struggled to replicate previous breakout hits such as “Stranger Things” and “Squid Game,” which were instrumental in boosting subscriber growth and viewer engagement.

The decision to downsize personnel is part of a broader trend within the media industry, where companies are seeking to control costs amid shifting market dynamics. Just last month, Disney also announced layoffs affecting around 300 employees, primarily in technology and human resources roles. Netflix’s move reflects a need to streamline operations while sustaining investments in areas critical to remaining competitive and appealing to subscribers in an evolving digital entertainment landscape.