Netflix is cutting about 1,000 jobs, roughly 6% of its workforce, the Los Angeles Times reported on Oct. 15, 2026. It's believed to be the largest layoff in the company's history.
The cuts come after Netflix lost its bid for Warner Bros. Discovery to Paramount, and as the company faces slower growth in how much people watch.
Signs of pressure
App-analytics firm Apptopia, in data reported by TipRanks on Oct. 14, found several warning signs in the U.S.:
- Netflix's U.S. app churn, a measure of people canceling, rose 16.6% from a year earlier in the third quarter. That's roughly double the second-quarter increase and the seventh straight quarter of rising churn.
- App downloads in the U.S. and Canada fell 20% to 7.4 million.
- Average daily U.S. viewing time on the app dropped to 73.2 minutes, from 77 minutes in the first quarter.
Competitors, especially YouTube, are capturing more of people's viewing time.
How the stock has done
Netflix shares have fallen roughly 25% in 2026 and are about 44% below their 52-week high of $124.86. The stock has also fallen the day after each of its last four earnings reports.
The company reports third-quarter results after the market closes on Tuesday, Oct. 20.
Why streaming companies cut staff even while profitable
Layoffs at a profitable company can seem confusing, but streaming businesses run on thin, hard-won margins after years of spending heavily to build content libraries and win subscribers. When growth slows, companies often look first at overhead and headcount rather than cutting the marketing or content budgets that drive new sign-ups. Netflix has also said it wants to run a leaner organization as it leans more on data and automation in areas like content planning and customer support.
Churn, the measure of how many subscribers cancel in a given period, matters because it's expensive to replace a lost customer. Streaming services typically spend money on marketing and free trial periods to win new subscribers, so rising churn forces a company to spend more just to stay even, which squeezes profit even if the subscriber count looks stable on paper.
A crowded field
Netflix popularized the subscription streaming model, but it now competes with YouTube, Disney+, Amazon Prime Video, Max, Hulu and a growing list of free, ad-supported services. YouTube in particular has become a major rival for viewing time because so much of its content is free and algorithm-driven, making it an easy default when people aren't sure what to watch. That competition for attention, not just subscription dollars, is part of why Netflix has leaned harder into live events, games and advertising in recent years.
What investors will be watching
- Revenue growth and whether price increases are offsetting slower subscriber gains.
- Advertising revenue from its cheaper, ad-supported plan.
- How much the layoffs are expected to save, and any one-time costs.
- Comments on competition and what Netflix plans after losing the Warner Bros. deal.
What this means for you
If you own Netflix stock directly, earnings day can bring big moves either way. Many investors avoid buying or selling right before a report, since the reaction is hard to predict.
If you're a subscriber, layoffs don't usually change your service. But slower growth often pushes streaming companies to raise prices or promote ad-supported plans. Review your streaming subscriptions every few months and cancel ones you're not using. Rotating services month by month is one of the simplest ways to cut your entertainment budget.
The bottom line
Netflix is trimming staff as competition heats up and more U.S. users cancel. The company remains profitable, but its stock has struggled in 2026. Investors will get a clearer picture on Oct. 20. For everyone else, it's a good time to audit your own streaming spending.
Sources: https://www.latimes.com/entertainment-arts/business/story/2026-10-15/after-nearly-buying-warner-bros-netflix-is-laying-off-1-000-workers-what-happened, https://www.tipranks.com/news/netflix-has-new-warning-signs-ahead-of-q3-earnings-as-u-s-app-churn-jumps-by-16-6
Content on The Evergreen Edit is for educational and informational purposes only and is not individualized financial, investment, tax or legal advice. Learn more.
This article is for educational purposes only and isn't personalized financial, tax or legal advice. Consider talking with a qualified professional about your situation.
Kiara Miller — Founder & Editor
Kiara Miller is the founder and editor of The Evergreen Edit. He has been doing independent finance research for two decades and reviews every article before it's published.
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