Netflix Bought a Record $4.8 Billion of Its Stock, Then Cut 1,000 Jobs

Shares still slid about 5% after the streamer cut its 2026 ad revenue forecast to about $2.7 billion from $3 billion.

From July through September, Netflix spent $4.8 billion buying back its own shares, the most it has ever spent on repurchases in a single quarter, according to its third-quarter letter to shareholders. Days before it released those numbers, the company laid off about 1,000 people, roughly 6% of its workforce, Deadline and TheWrap reported.

The stock fell anyway. Netflix shares dropped about 5% in late trading Tuesday after the third-quarter report, Deadline reported, and TheWrap put the after-hours slide at 6%. The trigger was the outlook: full-year revenue of $51.1 billion, up 13% but a sliver under the middle of the company's earlier range.

The bigger miss is in advertising. Netflix now expects about $2.7 billion in ad revenue for 2026, down from roughly $3 billion, and blames a slower-than-planned rollout of some ad products. Co-CEO Greg Peters told analysts the ad business, which has grown more than 80% this year, is running behind an aggressive target, TheWrap reported.

The layoffs show up in the letter too, as a line item. Netflix forecasts a fourth-quarter operating margin of 26%, down from 34.6% in the third quarter, and says about 1.2 points of the drop come from its "recently announced headcount reductions." Against the $13.4 billion in revenue it expects for the quarter, that works out to roughly $160 million, about a thirtieth of the third quarter's buyback.

The cuts reached the top. They included Bela Bajaria, Netflix's content chief, and Dan Lin, who ran film, Deadline reported, with former Disney and Fox executive Peter Rice taking over Bajaria's job and covering Lin's until a successor is named. TheWrap called it the streamer's biggest round of layoffs since 2022.

On the earnings call, Peters described the cuts as a hard choice. Netflix has "a responsibility to make hard trade-offs in service of our members, our partners, our employees, our investors, and ultimately our long-term growth," he said, according to TheWrap. Co-CEO Ted Sarandos told analysts Tuesday that the company's strategy is "unchanged."

What analysts keep circling back to is growth. Engagement rose just 2% in the first half of the year, TheWrap reported, and Netflix then said it would release its engagement reports just once a year. TheWrap also pointed to YouTube as a rising rival, and to the $83 billion Warner Bros. Discovery deal that fell apart earlier this year, which would have handed Netflix that company's studios and streaming business. The shares are down about 44% over the past year.

"It's a more competitive landscape and they need to make some changes," Evercore analyst Mark Mahaney said on CNBC, Deadline reported. The letter itself concedes the point in one line: "We know there's some investor concern about our view hours growth."

The quarter itself wasn't bad. Revenue grew 12% to $12.9 billion, and earnings of 87 cents a share beat the 82 cents analysts expected, TheWrap reported. Netflix says it'll take its ad tier to 15 more countries in 2027, starting in March.

And the letter is clear about where spare cash goes. Netflix reinvests first, then hands the excess to shareholders through buybacks, with $22.3 billion of authorized room still left. "Our capital allocation approach is unchanged," it says.

Source: Deadline, retrieved October 21, 2026. Other sources: the SEC, TheWrap.