Netflix plans to eliminate roughly 1,000 jobs after spending $5.9 billion repurchasing its shares in the first half of 2026, putting two of the streaming company’s financial decisions in contrast.
Its $4.7 billion second-quarter buyback, the largest in its history, was more than three times the $1.53 billion in free cash flow it generated over the same period.
The company disclosed the purchases in its July shareholder letter and quarterly filing. It repurchased 66.4 million shares through June, including 52.9 million in the second quarter. In April, directors authorized an additional $25 billion for repurchases, leaving $27.1 billion in unused authority as of June 30.
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Netflix says it first invests in its operations and potential acquisitions, maintains liquidity, and returns excess cash to shareholders. It reported $9.1 billion in cash and equivalents and $14.4 billion in gross debt at quarter-end.
The quarterly comparison does not describe the entire first half. Netflix generated $6.62 billion in free cash flow during the six months ended June 30, compared with $5.9 billion in share repurchases. The cash-flow figure includes the effect of a $2.8 billion termination fee received after Netflix abandoned its Warner Bros. transaction.
Q2 revenue rose 13% year over year to $12.56 billion, while net income increased 9% to $3.40 billion. Yet operating margin narrowed to 33.4% from 34.1%, and technology and development expenses climbed 22% to $1.01 billion. Netflix attributed $142 million of that technology expense increase to personnel-related costs.
The October 14 job reductions, affecting about 6% of the workforce, were confirmed in an employee memo from co-CEOs Ted Sarandos and Greg Peters obtained by the Associated Press and Reuters. Product, technology, legal, and human resources divisions are expected to bear most of the cuts. The company employed approximately 16,000 full-time staff at the end of 2025.
The executives said the business remained strong and was on track to deliver its full-year financial forecast. Netflix expects 2026 revenue of $51.0 billion to $51.4 billion and an operating margin of 31.5%.
The plan was not wholly new. Puck reported on October 9, citing unnamed sources, that Netflix was preparing to cut approximately 5% of employees.
Netflix has not publicly linked the layoffs to its repurchase program, quantified expected payroll savings, or disclosed severance costs, nor has it announced changes to the buyback authorization.
Its next scheduled financial update is October 20, when it will release Q3 results.
