Netflix reports slowing revenue growth following headcount reduction

As a general rule, when a company cuts its workforce by 6% right before an earnings report, it’s typically not a great look.

That general rule held true for Netflix, which reported Q3 earnings on October 20 after shedding around 1,000 jobs the week before—its largest cuts since 2022, according to The Wall Street Journal. A day after that workforce reduction announcement, the company also said its former content chief, Bela Bajaria, who had been with Netflix for a decade, was leaving.

That was the backdrop heading into the streaming service’s third-quarter earnings release.

For Q3 2026, Netflix posted $12.9 billion in revenue, a 12% climb from the same period last year. Sounds fine, until you learn that climb was the company’s lowest quarterly revenue growth in three years.

The company also adjusted its 2026 full-year forecast; it now expects $51.1 billion in revenue. Though that figure marks a 13% increase from the prior year, it’s on the lower end of Netflix’s previously forecast $51 to $51.4 billion range. It’s also below the $51.2 billion that Wall Street expected.

Many of Netflix’s markets “are mature and won’t grow at the rate they did when they were rapidly adding new subscribers, but [the company] still has growth drivers,” Matthew Dolgin, a senior equity analyst at Morningstar, wrote this week. He pointed to the launch of an ad-supported subscription tier in 15 international markets next year, and a YoY fall in customer churn that Netflix management said was better than expected.

A battleground. Investors have kept a close eye on the streamer ever since it tried and failed to acquire Warner Bros. Discovery, ultimately losing out to Paramount Skydance. Miscues like that have sent Netflix’s stock down over 40% in the last year.

While Netflix’s latest earnings report was far from sunny, it did little to brighten the company’s outlook, according to Jessica Reif Ehrlich, research analyst at Bank of America Securities.

“Netflix has been a battleground stock for much of 2026, with investor concerns centered on slowing engagement, moderating revenue growth, and the potential M&A activity,” she wrote in a memo shared with CFO Brew. “Recent [management] changes, to some, have validated some of these underlying concerns. While results and guidance were largely in line, the quarter did little to change the narrative.”

The company’s Q3 report also reiterated an age-old narrative: Layoffs and downbeat earnings reports tend to go hand in hand.