Netflix Inc has appointed Peter Rice as its new Chief Content Officer, replacing Bela Bajaria who is leaving after nearly 10 years. This leadership change occurs one day after the company announced layoffs of about 1,000 employees.

Rice, most recently chairman of Walt Disney Television and General Entertainment at The Walt Disney Co., takes over Oct. 26 to lead Netflix’s global content organization. The role spans scripted and unscripted series, film, and live events. Co-CEO Ted Sarandos described Rice as "one of the most effective at-scale operators in the entertainment industry."

Bajaria joined Netflix in 2016 and became chief content officer in 2023. Her tenure included hit shows such as Bridgerton and Squid Game, alongside partnerships with WWE and the NFL. Netflix and Bajaria did not immediately respond to requests for comment on the reason for her departure.

Layoffs come amid pressure for hits

On Wednesday, the company said it will cut roughly 6% of its workforce, its largest round of layoffs since 2022. The cuts primarily affect product, technology, legal, and human resources departments. Engagement has become investors' biggest concern, with YouTube and TikTok drawing viewers with free, user-generated content, giving them a cost advantage over Netflix. In July, YouTube captured 14.2% of U.S. TV viewing, while Netflix’s share was under 8%.

Analysts call for breakout hit

Rich Greenfield, co-founder of LightShed Partners, told CNBC that Netflix needs a breakout success similar to Squid Game to reignite growth. He noted that roughly two years have passed without the type of breakout content needed to materially improve engagement. Greenfield identified Netflix’s move into the creator economy, including video podcasts and courting YouTube talent, as a key potential growth driver. However, he emphasized that talent matters and that many of these deals have not yet launched, leaving their impact for next year.

Greenfield also highlighted that Netflix faces broader competition beyond streaming rivals. Investors are increasingly focused on technology companies and AI products, making it harder for traditional media stocks to attract attention. He argued that cost reductions alone are insufficient; Netflix requires a clearly differentiated growth strategy.

Earnings next week

Netflix reports third-quarter results after the market closes Oct. 20. Analysts expect earnings of 82 cents a share and revenue of $12.88 billion. On Thursday, shares closed 2.89% higher at $72.61 and fell 1.13% in extended trading to $71.79. The stock has fallen 20.20% this year and 39.66% over the past 12 months. In premarket trading on Friday, shares were down 3.87% at $69.80.

What the numbers show

The timing of the executive change coincides with significant operational adjustments. Netflix is cutting 6% of its staff while facing competitive pressure from platforms like YouTube, which held 14.2% of U.S. TV viewing in July compared to Netflix's sub-8% share. The stock's 20.20% decline year-to-date reflects market sensitivity to these engagement metrics and restructuring efforts ahead of Q3 earnings. Analysts note that despite initiatives in live TV and creator partnerships, the absence of a major breakout hit since Squid Game remains a critical hurdle for reversing slowing momentum.

Netflix Inc is cutting about 1,000 jobs, roughly 6% of its workforce, marking its largest reduction in headcount since 2022. The announcement arrives less than a week before the company reports third-quarter earnings on October 20.

Layoffs target product and tech teams

Co-CEOs Ted Sarandos and Greg Peters announced the cuts in a memo to employees on Wednesday. The majority of the affected roles are within Netflix’s product, technology, legal, and human resources divisions. This final figure exceeds the approximately 850 jobs (5% of staff) reported by Puck last week.

"Our mission to entertain the world is ambitious, and delivering on it requires us to be disciplined about where we prioritize our people and resources," the co-CEOs stated. They added that the business is strong and growing, with plans to continue investing aggressively in high impact areas. The last significant workforce reduction occurred in 2022, when Netflix cut about 450 jobs in two rounds after losing subscribers for the first time in more than a decade.

Growth slows and engagement declines

The stock tells a different story than management's optimism. Netflix shares have declined approximately 25% this year and more than 40% over the past 12 months. Much of the selling dates back to July, when Netflix forecast another quarter of slower revenue growth and came in below Wall Street expectations.

The company guided for 12% revenue growth in the third quarter and narrowed its 2026 revenue outlook to $51 billion to $51.4 billion. Full-year growth of 13% to 14% would be down from 16.5% in 2025. Sarandos acknowledged the slowdown at the Bloomberg Screentime conference, stating Netflix was "not growing as fast as I want."

Engagement has become investors' biggest concern. YouTube reached a 14.2% share of U.S. TV viewing in July, while Netflix slipped below 8%. Wells Fargo estimates that Netflix viewership in the first half of 2026 was down about 8% on an adjusted basis from the same period in 2023. HSBC analyst Mohammed Khallouf argued that YouTube’s gains are "increasingly coming at the direct expense of Netflix."

Competitive landscape shifts

Netflix’s competition also got bigger this month. On October 6, Paramount closed its $110 billion acquisition of Warner Bros. Discovery, creating Skydance Corp. Other media companies are cutting too; Disney said last month it would lay off around 300 employees, mostly in HR and technology.

Analysts remain cautious ahead of the results. Morgan Stanley and Barclays lowered their price targets to $80 and $70, respectively. However, Deutsche Bank upgraded Netflix to Buy, arguing engagement concerns are overstated because programming performance naturally moves in cycles.

What the numbers show

The timing of the layoffs suggests a strategic effort to manage operating expenses prior to reporting quarterly results. Analysts expect revenue of $12.88 billion against company guidance of about $12.86 billion. While the projected operating margin of 33.2% appears robust, it benefits from a favorable year-over-year comparison; last year’s third-quarter margin was suppressed to about 28% by a one-time Brazilian tax charge.

A key divergence exists between management's claim of a "strong" business and the market's reaction. While Netflix expects content spending to rise 10% this year, reducing back-office and tech staff helps cover the gap. However, eMarketer senior analyst Ross Benes noted that Netflix hasn't found another line of major revenue, suggesting the core subscription business could be nearing a ceiling despite new ad tiers and gaming initiatives.

At the time of publication, Netflix shares traded 0.09% lower at $70.39.