Netflix Grew Revenue 12% to $12.9 Billion — and Still Cut 6% of Staff

Netflix posted $12.9 billion in third-quarter revenue, up 12% year over year — and in the same season cut roughly 6% of its workforce.

That's the tension worth watching. The company that helped make Blockbuster obsolete by trading DVD envelopes for instant streaming is now confronting a problem every successful founder eventually meets: what happens when your breakthrough becomes ordinary?

By Grace Kim, Business Bearings

The October shake-up

In October, Netflix replaced chief content officer Bela Bajaria with former Disney executive Peter Rice. Film chief Dan Lin departed. The headcount reduction — about 6% of staff — landed alongside those moves, not after a downturn but during double-digit revenue growth.

The pattern is deliberate. As organizational systems consultant Tony Manganiello puts it, leaders "sometimes need to look beyond a successful business model before declining results force them to." Netflix isn't staring at Blockbuster's fate; that's exactly what makes the situation interesting.

The takeaway: Netflix is rebuilding leadership from a position of strength, not distress.

Why does streaming no longer set Netflix apart?

Because everyone has it. Netflix's original breakthrough — moving from mailing DVDs to delivering entertainment instantly — redefined how people watched movies. Today, streaming is everywhere. In Manganiello's framing, "what was once a competitive advantage has become the price of admission."

Convenience still works. It just doesn't win on its own anymore.

The takeaway: the technology that built Netflix is now table stakes across the industry.

Who's eating the audience?

YouTube, by Nielsen's count. The measurement firm found YouTube accounted for 15.8% of U.S. television viewing in August, compared with 7.7% for Netflix — roughly double the share.

The two companies run different business models, but they're hunting the same limited resource: viewers' attention. And attention doesn't care about your legacy.

The takeaway: YouTube outdrew Netflix two-to-one on American TVs in August, per Nielsen.

What does the NFL analogy reveal?

Manganiello, writing the piece that frames this debate, reaches for football. An NFL coach who wins a Super Bowl can't assume the same plays work next season. "Opponents study the film, adjust schemes, and sometimes borrow elements of the winning team's strategy," he writes.

The best coaches don't scrap what made them successful. They separate two things: the principles that win games from the plays that won the last one. They adapt because their competition adapts.

Netflix's situation maps cleanly. Its technology still delivers tremendous convenience — the principle — but convenience alone no longer separates it from the pack.

The takeaway: Netflix must protect what works while retiring what's stopped working.

What comes next?

The leadership overhaul gives Netflix fresh eyes on content strategy at precisely the moment YouTube's share of the living room keeps climbing. Revenue is growing 12%; attention share is not. Closing that gap is the reinvention problem Peter Rice now inherits.

As Manganiello warns, "what got you here won't necessarily get you there." For the company that once said that to Blockbuster, the sentence now cuts both ways.