YouTube and TikTok competition has intensified: Netflix is laying off thousands of people

Digital broadcasting giant Netflix decided to lay off approximately a thousand employees globally. The cuts, covering 6 percent of the company's total workforce, are expected to occur mainly in human resources, legal, product development and technology departments.

Netflix's most comprehensive wave of layoffs since 2022 comes at a time when competition in the digital broadcasting industry has intensified and concerns about the company's growth rate have increased.

Netflix's co-CEO Ted Sarandos stated that the company was not growing at the pace he wanted at the Bloomberg Screentime Summit he attended last month and said, "We are not growing as fast as I would like."

Sarandos and co-CEO Greg Peters stated in their e-mail to employees that the company has rearranged its resources in line with its growth and innovation targets.

"Our mission to entertain the world is ambitious, and achieving it requires us to be disciplined about where we prioritize our employees and resources," the executives said.

Netflix management stated that despite the layoffs, the company is on track to meet its annual financial targets and will continue to invest in areas that will support growth.

It was noted that the employees who will be laid off will be informed of their situation by their managers in a short time.

YOUTUBE AND TIKTOK COMPETITION IS GROWING

Netflix's dismissal decision coincided with a period when competition in the digital broadcasting industry was increasingly intense.

While free video platforms such as YouTube and TikTok take a larger share of users' screen time, Netflix's efforts to increase viewer interaction are closely followed by investors.

On the other hand, Paramount's Warner Bros. The agreement to acquire Discovery at a company value of approximately $110 billion was one of the important examples of merger and acquisition activities in the sector.

Netflix had previously attempted to acquire Warner Bros.' publishing and studio assets, but withdrew from the deal after Paramount's offer.

THE SEARCH FOR A NEW SOURCE OF INCOME CONTINUES

Netflix has recently been turning to different business models in order to reduce its dependence on subscription revenues.

While the company expands its ad-supported subscription options, it also increases its investments in the gaming industry and live broadcast content. However, it is stated that these initiatives have not yet created a source of income as large as subscription revenues.

Ross Benes, senior analyst at market research company eMarketer, pointed out that Netflix is ​​having difficulty creating a new and large source of income.

Benes stated that the growth in the company's subscription model may approach the limit over time and that it will need new areas to diversify its revenues.

The financial results that Netflix will announce on October 20 are important for the company's growth performance and future strategies.

The company carried out its last major wave of layoffs in 2022. At that time, Netflix laid off approximately 450 employees after experiencing subscriber loss for the first time in more than ten years.

With the latest decision, the company has made a comprehensive staff reduction again after four years.