Netflix Cuts 6% of Staff and Removes Top Executives as U.S. Growth Slows

Netflix has been through a turbulent stretch. The streaming company laid off about a thousand employees, roughly 6% of its workforce, and removed a number of senior executives, in a restructuring that followed a report of slower quarterly revenue growth and weaker engagement in the United States.

NPR's Mandalit del Barco described the move as a surprise. After the layoffs, the company's chief content officer was fired, and the chair of Netflix film and six other top executives were also let go. Company leaders said they had to make tough decisions about where to trim or redirect investment.

The cuts came even though Netflix beat Wall Street expectations in its latest quarter. Co-CEO Ted Sarandos told investors this week that viewer engagement in the U.S. is slowing. "We do need better execution in the U.S. It's just not growing as fast as it could or as fast as we'd like," he said.

Netflix operates in 190 countries, and Sarandos credited the outgoing chief content officer, Bela Bajaria, with expanding the company's global reach. Her replacement is Peter Rice, who is widely admired in Hollywood. Rice is a former president of 21st Century Fox, and during his time leading Fox Searchlight he greenlit films including "Slumdog Millionaire," "Juno" and "Little Miss Sunshine."

It remains to be seen whether and how Netflix's content will change under the new leadership. Del Barco noted that the streamer has not had a water-cooler hit in some time. Natalie Jarvey, who covers the creator economy in Hollywood, called the shake-up "messy" and "sloppy" on "The Ankler Agenda" podcast. She said it shocked many people, but added that it still reflects an approach to strategy and decision-making very different from that of many Hollywood companies.

The upheaval is playing out against a wider wave of consolidation across the entertainment industry. A few weeks ago, Disney carried out its third round of layoffs in six months, and many in the business are bracing for large cuts following Skydance's recent merger of Paramount and Warner Bros. Skydance outbid Netflix in the contest to acquire Warner Bros. and its assets.

Netflix also faces competition from TikTok and YouTube, which have more revenue and a bigger audience than the streamer. Del Barco said Netflix appears to be playing catch-up by signing digital content creators.

Sarandos continues to say Netflix is a streaming company first. Even so, he was named this week to the board of directors of the American Film Institute, and Netflix still releases some films in theaters before they reach its service. This Thanksgiving, it will put "The Further Mis-Adventures Of Cliff Booth," starring Brad Pitt, in IMAX theaters. The film is a sequel to Quentin Tarantino's "Once Upon A Time.. In Hollywood."

Netflix has also moved into live sports, an area its executives once said it would never enter. The company is now livestreaming events including NFL games and, next summer, the Women's World Cup.