Netflix Co-CEO admits US streaming platform needs better shows after 1,000 layoffs

Netflix changed both its workforce and its creative leadership. About 1,000 employees lost their jobs. Bela Bajaria was removed as Chief Content Officer shortly afterward, and film chief Dan Lin later announced his departure. The timing showed a broad reset of the content operation.

Peter Rice, a former Disney and Fox executive, replaced Bajaria. He also assumed oversight of the film division while Netflix searches for Lin’s successor. Co-CEO Ted Sarandos highlighted Rice’s experience with talent relations and Netflix’s need to remain attractive to creative workers.

The changes followed concerns about slowing growth and weaker programming performance. Sarandos said Netflix could improve its slate but did not need a complete strategy change. The company wants the reorganization to produce films and television programs that make Netflix a necessary subscription for viewers.

A programming slate is the collection of shows and films Netflix offers viewers. Improving it means creating or acquiring stronger titles, especially programs that attract attention and keep people using the service. The goal is a lineup compelling enough to make Netflix feel necessary to subscribers.

The article gives a clear example of the problem. Sarandos reportedly complained that Netflix lacked enough new hit shows, while US viewing time was falling. He said the company had an opportunity to take its slate to the next level. That points to better choices and execution across television and film.

Netflix is not abandoning its broader strategy. It has expanded into games, podcasts, and live events, but Sarandos wants the core content business strengthened. The leadership changes are intended to improve the films and programs that support subscriptions and viewing.

The scale of Netflix’s reset appears in three figures. The company laid off about 1,000 employees. Third-quarter revenue reached $12.87 billion, up 11.8% from the previous year. Although that matched forecasts, it was Netflix’s slowest revenue growth in nearly three years.

Advertising expectations also weakened. Netflix reduced its expected 2026 advertising revenue from approximately $3 billion to about $2.7 billion. That is a reduction of roughly $300 million, or about 10% of the earlier forecast. The company blamed slower-than-expected introduction of some advertising features.

The figures created pressure even though quarterly earnings per share beat expectations. Netflix forecast fourth-quarter net income of $2.79 billion and earnings of 67 cents per share, below analysts’ expectations. The mixed results reinforced concerns about slower growth and execution.

Share prices reflect what investors expect a company to earn in the future. Netflix’s results raised doubts about that future. Revenue growth slowed to 11.8%, its lowest rate in nearly three years, while the company reduced its 2026 advertising forecast. Those signals suggested that important growth engines might develop more slowly.

Netflix also forecast fourth-quarter net income of $2.79 billion and earnings of 67 cents per share. Analysts had expected more. Even though third-quarter earnings per share beat estimates, the weaker forward outlook mattered more to investors deciding what Netflix might be worth.

The immediate reaction was sharp. Netflix shares fell nearly 6% in after-hours trading. More than 20 brokerages subsequently lowered their price targets. Their revisions reflected lower expectations for revenue, advertising progress, earnings, or overall growth, rather than simply the quarter’s past results.

Netflix believes hit programming depends on attracting excellent writers, directors, actors, producers, and other creative workers. Strong talent has choices about which company receives its best work. That makes Netflix’s reputation and relationships important, especially when competition for creative projects is intense.

Peter Rice’s appointment illustrates this logic. Sarandos praised Rice’s understanding of talent relations and said Netflix wants to be the place where creative people love doing the best work of their lives. Rice came from Disney and Fox, and he replaced Bajaria while also overseeing films temporarily.

The expected payoff is a stronger content slate. Better access to creative talent can help Netflix develop more appealing films and television programs. That matters because Sarandos said the company lacked enough new hit shows, and Netflix wants programming that makes its service necessary for viewers.

Netflix is refocusing on television and film because those businesses remain central to the service’s appeal. Internal concerns reportedly included too few new hit shows and falling viewing time in the United States. If the core lineup weakens, newer offerings may not solve the problem of keeping Netflix essential to viewers.

The company has already expanded into video games, podcasts, and live events. However, Sarandos now wants stronger execution in the traditional content areas. The leadership changes place Peter Rice over content and temporarily over films, while Netflix searches for a new film chief.

This is a shift in emphasis, not a complete strategic reversal. Sarandos rejected the need for a fundamental change in overall strategy. Netflix will continue its broader direction, but it is prioritizing better television and film programming to support viewing and subscriptions.

The article focuses on Netflix’s subscription business and its growing advertising plans. In general, a streaming service earns money when people pay for access, while an advertising tier or advertising products can add revenue. Content quality matters because appealing shows and films can attract viewers, encourage subscriptions, and keep existing customers engaged.

The mechanism is straightforward. A strong hit can increase viewing and make the service feel necessary. More viewing can support subscriptions and create opportunities to show advertisements. Producing and licensing content costs money, so Netflix must balance the expense of its slate against the revenue that programming helps generate.

Netflix’s figures show why all these pieces matter. Revenue rose 11.8%, but growth slowed sharply. The company cut its 2026 advertising forecast to $2.7 billion because features launched more slowly than expected. The article does not provide Netflix’s content costs, but better execution remains central to future growth.