Netflix Shares Slide as Weak Forecast Follows Layoffs and a Content-Chief Shake-Up

Netflix shares fell nearly 6 percent in after-hours trading this week after the company posted its slowest revenue growth in almost three years and gave a fourth-quarter profit forecast well below Wall Street's estimates, capping a stretch in which the streamer cut about 1,000 jobs and replaced two of its top content executives.

Third-quarter revenue rose 11.8 percent to $12.87 billion, Netflix said in its official shareholder letter filed October 20, roughly in line with its own forecast but the slowest pace since 2023. Earnings came in at 87 cents a share, ahead of analysts' 82-cent estimate. The outlook undercut that headline number: Netflix projected fourth-quarter net income of $2.79 billion and earnings of 67 cents a share, both below Wall Street's targets, a shortfall the company tied partly to a roughly 1.2-percentage-point hit to operating margin from the layoffs, according to the results Netflix also disclosed that day in a regulatory filing with the Securities and Exchange Commission.

The numbers landed alongside a shake-up in Netflix's film and television units. The week before the earnings call, Netflix laid off roughly 1,000 employees — about 6 percent of its staff — and replaced Bela Bajaria, its chief content officer since 2020, with Peter Rice, a former Disney and 21st Century Fox executive. Separately, film chief Dan Lin is departing after roughly two and a half years in the job; Rice will oversee the film division as well until a successor is named.

Co-chief executive Ted Sarandos did not dispute that the changes were a response to underperformance. "I know that we could do better" on execution in the U.S., he told analysts, according to an account of the earnings call. Co-CEO Greg Peters was similarly candid about the advertising business, saying the company is "currently a bit behind our aggressive target for the year," and Netflix trimmed its 2026 advertising-revenue forecast to about $2.7 billion, down from roughly $3 billion, after some ad features rolled out more slowly than planned.

Netflix does not disclose subscriber counts, but the analytics firm Antenna reported that the service lost U.S. subscribers in every month of 2026 through September, excluding wholesale bundles; a company spokesperson said that data is "not representative of Netflix's business performance," as Reuters reported. The stock, which had already lost more than 40 percent of its value over the past year, fell nearly 6 percent further in after-hours trading on the results.

The pressure now falls on Rice and the content team to deliver through the holidays, with a heavy fourth-quarter slate including a Quentin Tarantino-written, David Fincher-directed film, a limited series on the murder of JonBenét Ramsey starring Melissa McCarthy and Clive Owen, the final season of "Emily in Paris," and a run of live sports including a Thanksgiving Eve NFL game. Full results and investor materials are posted on Netflix's own investor relations site.