Netflix co-chief executives Greg Peters and Ted Sarandos defended the company's decision to cut 6% of its workforce on Friday, framing the layoffs as part of a broader shift toward artificial intelligence and tighter content spending. The announcement accompanied the streamer's third-quarter earnings report.

The job cuts represent Netflix's largest round of reductions in years. Peters and Sarandos told staff the company was reallocating resources toward AI tools for production, recommendation and dubbing, while concentrating investment on fewer, higher-performing titles.

The earnings report drew intense scrutiny from Wall Street. Analysts at firms including Morgan Stanley and Wedbush questioned whether rising AI and content costs would compress margins. Netflix shares fell in after-hours trading as investors weighed the restructuring against subscriber growth figures.

The layoffs proved contentious for a company that has publicly championed creative talent. Industry unions including the Writers Guild of America criticised the AI emphasis. Netflix executives insisted the cuts targeted corporate and overlapping roles rather than core production teams.

Sarandos said the company remained committed to its programming slate heading into 2027. "We are building a more focused Netflix, investing in the technology and the stories that our members value most," he said during the earnings call.