Netflix to cut 800 jobs as growth stalls, YouTube widens lead

"I just keep scrolling and there's nothing left to watch," one Netflix user said.

Warning signs are flashing for Netflix, which once dominated the global streaming market. With growth slowing under pressure from YouTube, the company is moving to cut roughly 5 percent of its global workforce.

Netflix has long been criticized as a key driver of rising production costs in South Korea, paying top actors 300 million won ($224,000) or more per episode. Despite the massive spending, there are growing concerns that the platform has hit a ceiling in its ability to retain subscribers through content alone.

Foreign media outlets including the Los Angeles Times reported that Netflix plans to lay off about 800 employees, representing roughly 5 percent of its total workforce. The cuts are expected to fall primarily on content production staff, including those working on feature films.

The restructuring would be the largest at Netflix since 2022. That year, the company laid off 150 full-time employees along with some contract workers in May amid a subscriber decline, then cut an additional 300 employees — about 3 percent of its workforce — in June.

Industry observers say the layoffs reflect deepening concern that Netflix's growth slowdown could become prolonged as YouTube continues to gain ground. Netflix co-CEO Ted Sarandos acknowledged the challenge at a recent Bloomberg event, saying the company is "not growing as fast as we want to."

Data from market research firm Nielsen underscores the gap: in July, Netflix accounted for 7.8 percent of total US TV streaming hours, roughly half the 14.2 percent share held by YouTube.

Despite heavy content spending, viewing hours are not growing as expected. In the first half of this year, watch time rose just 2 percent from a year earlier.

Netflix is also pulling back more aggressively in gaming. After shutting down game developer Night School Studio in August, the company is now set to close Moonroot, a game studio based in Helsinki, Finland.

The slowdown is playing out in South Korea as well. Netflix still leads the domestic streaming market by a wide margin, but the absence of a clear blockbuster has begun to erode its share.

According to market research firm WiseApp·Retail, Netflix held a 37.8 percent share of monthly active users among domestic streaming apps in May. That compares with a 40 percent share recorded in June last year. Netflix had maintained a share in the low-to-mid 40 percent range through the end of last year before slipping into the 30s within a year.

The share price has tumbled 43 percent over the past year. Second-quarter sales this year rose 13 percent from a year earlier, but the stock has fallen on a widespread view that Netflix has produced no standout hit this year.

Investment banks have also turned more cautious. Wells Fargo recently downgraded its rating from neutral to underweight, while HSBC cut its recommendation from buy to hold.