Netflix is losing its share of US TV viewership. The streaming platform accounted for 7.8% of all television viewing time in the US this year, down from 8.8% a year ago. Meanwhile, YouTube's share increased from 13.4% to more than 14%. These figures show that Americans are spending a smaller share of their TV-watching time on Netflix and more time watching YouTube, according to Nielsen data.
Netflix is also facing pressure to reduce costs. On Wednesday, Netflix announced plans to cut around 6% of its workforce, affecting roughly 1,000 employees. This is the company's biggest round of job cuts since 2022. Yahoo Finance reported that the cuts come as Netflix deals with a declining audience share and a falling stock price.
Netflix job cuts target four departments
Several departments will be affected by the job cuts. Netflix's product, human resources (HR), technology and legal departments will be the main focus of the reductions. The company's co-chief executive officers, Ted Sarandos and Greg Peters, shared the information in an email to employees.
YouTube competition puts pressure on Netflix
YouTube and other media companies are putting pressure on Netflix. YouTube has increased its share of US TV viewing while Netflix's share has declined. This growing competition is making it harder for Netflix to maintain its position in the streaming market, Yahoo Finance reported.
Even Warren Buffett has reportedly become a regular YouTube viewer. The billionaire investor watches YouTube every night, according to a report by The Wall Street Journal. His viewing habits highlight how YouTube has become a platform for a wide range of audiences, including well-known business figures.
{{/usCountry}}Even Warren Buffett has reportedly become a regular YouTube viewer. The billionaire investor watches YouTube every night, according to a report by The Wall Street Journal. His viewing habits highlight how YouTube has become a platform for a wide range of audiences, including well-known business figures.
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Paramount and Warner Bros. add to Netflix competition
Netflix is also preparing for stronger competition from a larger media company. The expanded Skydance media business now includes Paramount and Warner Bros. This brings major film and streaming properties under a larger corporate group. Netflix will have to compete with these companies as the entertainment industry continues to consolidate, Yahoo Finance reported.
The streaming industry is entering a new phase of competition. Larger media companies are combining their businesses and streaming offerings, creating stronger competitors. At the same time, these companies are fighting for viewers against free online videos, making the competition more difficult for traditional entertainment businesses.
Young creators are adding to the pressure on streaming platforms. Teenagers and young adults are producing and sharing videos for free on platforms such as Instagram, TikTok and YouTube. These videos compete for viewers' time and attention, even though they are different from the films and television shows offered by paid streaming services.
AI use raises questions about Netflix layoffs
Artificial intelligence could also be linked to Netflix's workforce cuts. Netflix, like other companies, is dealing with the growing use of AI. Yahoo Finance noted that most of the announced cuts involve corporate departments rather than directly focusing on creative workers. This raised the possibility that entertainment companies could use AI tools to improve productivity and reduce administrative costs.
However, there is no confirmation that AI caused the job cuts. The possibility that AI could help companies perform administrative work with fewer employees remains an observation, not a confirmed explanation from Netflix.
Hollywood's AI debate has mainly focused on writers and actors. Many creative professionals have publicly opposed the use of AI in their work. However, entertainment companies may be more willing to use AI in business operations and other corporate departments, similar to technology-focused companies across the US, Yahoo Finance noted.
Netflix focuses on costs as stock reverses gains
Netflix's decision may be part of a wider cost-cutting strategy. Companies often reduce their workforce and spending to improve efficiency and protect profit margins. Netflix's next earnings report could provide more details. The company was expected to report its results on Tuesday. The report could offer more information about its business performance and the reasons behind its latest decisions.
Netflix's stock initially rose after the announcement but later gave up its gains. Shares first moved higher after the company announced the job cuts. However, the stock later reversed those gains and traded virtually unchanged, Yahoo Finance reported.
The key takeaway is that Netflix faces pressure from several directions. Its share of US TV viewing has fallen to 7.8%, while YouTube's share has climbed above 14%. Netflix is also dealing with competition from other media companies, free online video creators and the need to control costs. The company's latest workforce cuts come as it tries to navigate these challenges, although the precise reasons for the reductions have not been fully explained.