Netflix just started its biggest round of layoffs in years

• Netflix is cutting about 1,000 employees, following in the footsteps of other major media companies.
• The cuts impact staffers on the product, tech, and HR teams, a person familiar with the move said.
• Shares of the streaming giant are down significantly this year and its engagement growth has slowed.

Netflix is laying off about 1,000 employees in its biggest round of cuts since 2022, a person familiar with the plans confirmed.

The streaming giant is letting go of staffers primarily across the product, tech, HR, and legal teams, the person said. Employees impacted by the downsizing were notified on Wednesday.

The Wall Street Journal first reported the news.

Other media giants have made cuts in recent weeks. NBCUniversal said in early October that it's parting with a few hundred global streaming tech employees, while Disney did its third round of layoffs in six months in late September.

Netflix's cuts come a week before it reports third-quarter earnings, which will be after the closing bell on October 20. Its last major round of layoffs was in 2022, after the company lost subscribers for the first time in more than a decade.

Co-CEOs Ted Sarandos and Greg Peters are contending with a lagging stock price, which is down more than 30% over the last six months and over 40% over the past year.

Sarandos said at a Bloomberg event in late September that "we're not growing as fast as I want us to, and we're working on making that move faster."

Netflix met Wall Street's earnings expectations last quarter but said it would start posting its detailed engagement report once a year, instead of twice a year. The company told shareholders that "engagement is not just the quantity of view hours, but also refers to the quality and variety of our offering."

The reporting change troubled investors, as engagement is generally correlated with subscribers' willingness to stick around and pay higher prices. (Netflix hiked prices in March to $19.99 a month from $17.99 for its standard ad-free plan and to $8.99 for its ad-supported plan, up from $7.99.)

Netflix's viewership grew 2% in the first half of the year. Its 97 billion viewing hours are likely far higher than any of its paid streaming peers, which don't disclose engagement in the same way.

Netflix generated 7.8% of viewership on US TVs in July, according to the latest data from Nielsen, below YouTube's 14.2% share but well above third-place Disney's streamers at 4.7%.

However, Netflix's streaming viewership share is down from 9% in December, which was its highest mark in more than five years, thanks to hit shows like "Stranger Things."