Netflix Is Cutting About 1,000 Jobs and Its Content Chief Is Out, Days Before Earnings
Netflix just axed 6% of its workforce and replaced its content chief days before a major earnings report, and the executive Sarandos chose to fill the role signals a sharp turn in how the company plans to compete.
Netflix (NASDAQ:NFLX | NFLX Price Prediction) cut about 1,000 jobs, roughly 6% of its employees, on October 14, 2026. Reports described it as the most sweeping round of layoffs in its history. On October 15, the company said chief content officer Bela Bajaria is leaving and that Peter Rice will replace her.
Netflix announced the executive change itself. The layoff count comes from reporting, and the company has not disclosed a severance charge or a savings target.
Shares rose 2.89% to close at $72.61 on October 15, then slipped 1.12% to $71.80 after hours. Even after that gain, the stock trades about 42% below its 52-week high of $124.86, and the company’s market value stands at $302.34 billion.
Third-quarter results come after the close on October 20, 2026. Changing both the content leadership and the staff this close to the report suggests management wants to present a clear plan on costs and engagement, with the new structure already in place when analysts start asking questions.
Why Sarandos Chose an Operator to Run Content
Co-CEO Ted Sarandos described the hire this way: “Peter is one of the most effective at-scale operators in the entertainment industry.” He also thanked Bajaria for “a decade of dedication, innovation, creativity and leadership.”
Rice built his career at Fox Searchlight, ran Fox Networks Group and later led Walt Disney Television until he was let go in 2022. Picking an executive known for running large budgets signals that spending control now carries as much weight as creative instinct.
That shift matters because Netflix expects content expense to rise about 10% this year, above its five-year average of 8%. Second-quarter free cash flow also fell 32.7% to $1.53 billion on higher cash taxes.
Weak Engagement Growth Explains the Urgency
Viewing grew just 2% in the first half of 2026. Hours watched are what Netflix sells to advertisers, and the company expects ad revenue to roughly double to about $3 billion this year.
Engagement also supports pricing power. Netflix raised prices in the U.S., Mexico and Spain, and management says those increases performed as expected. Slow growth in viewing, however, limits how often it can raise prices again.
Co-CEO Greg Peters has said that “all hours are not created equal.” Live events support that view: six of the top 10 new member sign-up days in the past five years came from live programming.
Layoffs, Live Sports and a Margin Promise
Bajaria joined from NBCUniversal in 2016. She oversaw Bridgerton, Arcane and Squid Game and led the push into live events, NFL games and the 2027 FIFA Women’s World Cup.
Live programming takes 5% of the 2026 content budget but produces 1% of view hours. An executive hired as an operator is likely to examine that ratio closely.
Netflix guided third-quarter operating margin to 33.2% and diluted EPS to $0.82. Investors are likely to see the job cuts as a way to protect those targets, although a severance charge could weigh on reported results for the next few quarters.
What Could Move NFLX Stock After the Earnings Report
The fundamentals look solid. Revenue grew 13.4% in the second quarter, the stock trades at about 28 times trailing earnings, and Netflix has $27.1 billion of buyback capacity left.
Expect the stock to be volatile around the report. Netflix shares fell on the day of each of its last six earnings reports, including a 7.26% drop after July’s beat.
The shake-up looks like a reset, because second-quarter revenue grew double digits in every region. My view is wrong if the October 20 report cuts the 31.5% full-year operating margin target, or if shares close below $65.08, the low on the day after July’s report.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
