Netflix Is Reportedly Cutting 5% of Its Staff. Its 2022 Layoffs Came Days After the Stock Bottomed.
2026-10-09 21:23
•Daniel Sparks •The Motley Fool
•• • Axe Cap view
Netflix Cuts Staff, Signaling Growth Concerns
Netflix’s 5% workforce reduction highlights slowing growth despite solid margins.
Netflix’s plan to cut 800 jobs despite holding a strong 33% operating margin is a clear sign the streaming giant is bracing for slower growth. Revenue growth in the past year dropped sharply from 18% to just 13%, forcing management to tighten non-content spending. In 2022, layoffs happened near a stock bottom after a crisis in subscribers, but this time Netflix still grows, albeit more cautiously. South African investors won’t find a direct Netflix share to buy, but the USD/ZAR exchange rate could respond if global tech sentiment sours, given South Africa’s sensitivity to dollar weakness or strength. Locally, be wary of tech-related counters like Naspers and Prosus, whose shares tend to follow global streaming and online media trends. A cooling in US tech might drag these down, though if Netflix pivots successfully, the risk for these remains limited. this is just our opinion and not financial advice
Avoid adding exposure to Naspers and Prosus for now while the Netflix story unfolds. Keep an eye on USD/ZAR—a stronger dollar could pressure South African tech stocks further.
- USD/ZAR
- Naspers
- Prosus
- Netflix surprises with a new growth catalyst
- USD/ZAR moves sharply due to global tech shifts
6/10
Netflix is reportedly planning to cut around 5% of its ~16,000-person workforce (approximately 800 jobs) as early as next week. The layoffs aim to align non-content spending growth with slowing revenue growth. Unlike the 2022 layoffs that coincided with a stock bottom, the current situation differs: Netflix maintains double-digit revenue growth and a 33.4% operating margin, suggesting this is a margin optimization move rather than a defensive measure. The stock trades at 19x forward earnings, with revenue growth cooling from 18% to 13% year-over-year.
Our take is based on reporting first published by The Motley Fool.