Netflix is facing growing pressure to reignite growth, with the streaming giant cutting around 1,000 jobs as it struggles to produce enough hit shows, attract more viewing time and expand beyond its subscription business.

The job cuts represent approximately 6 per cent of its global workforce and are among the largest in the company’s history. According to reports, the reductions primarily affect technology, product, legal and HR teams.

Netflix’s co-chief executives, Ted Sarandos and Greg Peters, said the company needed to make more focused decisions about how it allocates people and resources. 

The cuts come despite Netflix remaining profitable and having more than 325 million subscribers worldwide.

The problem is that audience engagement is growing slowly, creating doubt around how effectively the company can continue its business expansion.

According to the Los Angeles Times, Netflix viewing time increased by just 2 per cent in the first half of 2026 compared with the same period a year earlier. This comes despite the company increasing its content spending by 11 per cent to around US$20 billion (around A$28.5 billion).

Netflix built its global position by producing original programming at scale, with shows like Stranger Things and Squid Game becoming international hits.

However, as major series conclude and audiences sign up to competing streaming services, replicating those successful established franchises has become more and more difficult.

Netflix is also facing stronger competition from traditional streaming rivals, including HBO Max and Apple TV, alongside free video platforms such as YouTube and TikTok.

YouTube is particularly challenging because it offers an enormous supply of creator-produced content, which comes free of the  production costs a streaming service puts in when commissioning major television series and films.

According to Nielsen figures, YouTube accounted for 14.2 per cent of US television streaming time in July, compared with Netflix’s 7.8 per cent.

Netflix has been expanding into advertising, live sports, video podcasts and gaming to generate additional revenue and encourage subscribers to spend more time on its platform.

However, Reuters reported on October 21 that Netflix had lowered its advertising-sales forecast, adding to investor concerns about slowing revenue growth. Gaming has also yet to become a significant contributor to the company’s overall business. 

The company is now under pressure to demonstrate that these newer businesses can deliver meaningful returns and are not simply increasing costs.

Netflix also lost out in its pursuit of Warner Bros. Discovery, removing a potential avenue for expansion through a major acquisition.

Despite the challenges, Netflix remains financially strong. Its second-quarter 2026 revenue increased 13  per cent year-on-year to US12.6 billion, while net income rose 9 per cent to US3.4 billion.

The challenge is sustaining that performance in the face of rising content costs and slower audience growth.Â