Netflix shares under pressure as chief content officer departs
Netflix Inc shares fell 2% on Friday after the streaming company announced that Chief Content Officer Bela Bajaria is leaving after 10 years with the company, to be replaced by former Disney executive Peter Rice. The leadership change comes one day after Netflix disclosed layoffs affecting 6% of its workforce.
Bajaria, who became Chief Content Officer in January 2023 after serving as Head of Global TV since 2020, managed an annual content budget of approximately $17 billion and reported directly to co-CEO Ted Sarandos. During her tenure, she oversaw some of Netflix's most successful programming, including global phenomenon "Squid Game" and hit series "Wednesday," while also steering the company's expansion into live sports.
Before joining Netflix, Bajaria made history as the first woman of color to lead a major television studio when she served as President of Universal Television.
Peter Rice brings prestige content experience
The streaming company's choice of Rice brings aboard an executive with extensive experience in prestige content. Rice previously led Fox Searchlight Pictures as president, overseeing acclaimed films including "Slumdog Millionaire," "Juno," "Little Miss Sunshine," and "Sideways." During his tenure at Disney, where he departed in June 2022, the television businesses under his leadership received 147 Primetime Emmy nominations in 2022 and 146 in 2021.
Leadership change amid growth challenges
The leadership transition occurs as Netflix navigates challenges including slowing growth. Co-CEO Ted Sarandos acknowledged in September 2026 that the company is "not growing as fast as I want us to," adding that Netflix is working to accelerate momentum. The streaming giant reached 325 million paid subscribers globally at the end of 2025.
The layoffs announced Thursday affect roughly 1,000 positions from Netflix's workforce of approximately 16,000 full-time employees worldwide as of the end of 2025. The cuts represent the largest round of job reductions at the company since 2022.
Analyst outlook and advertising growth
Wedbush analysts indicated the restructuring should address engagement concerns while shifting spending priorities from heavy infrastructure investments toward more focused content development. "Engagement remains central to the bear case; however, ad revenue matters more," Wedbush wrote in a note to clients.
The brokerage firm noted that advertising revenue, which grew from $1.5 billion in 2025 following the November 2022 launch of Netflix's ad-supported tier, remains on track to roughly double to about $3 billion in 2026. The US upfront advertising commitments are in advanced stages, though analysts cautioned the advertising ramp may take longer given the significant organizational changes underway.
Financial projections and subscriber trends
Wedbush expects Netflix to continue share buybacks in the third quarter and projects third-quarter revenue of $12.865 billion, compared with consensus estimates of $12.88 billion and company guidance of $12.86 billion. The firm forecasts earnings per share of $0.83, slightly above both consensus and guidance of $0.82.
The brokerage's estimates assume 5% year-over-year growth in global subscribers, with net paid additions of 2.2 million and a 500,000 decline in the US and Canada. Average revenue per member is expected to rise sequentially on higher prices, improved subscription retention and growing advertising spend.
Wedbush's third-quarter subscriber survey showed customer churn from March price increases remained light, while the ad-supported tier stayed ahead of premium tiers in subscribers' intent to remain for a second consecutive quarter. Intent to start or return to the service in the fourth quarter improved both quarter over quarter and year over year, led by recent and lapsed subscribers.
In a memo to employees, Netflix confirmed it remains on track to meet 2026 guidance of revenue between $51.0 billion and $51.4 billion, a 31.5% operating margin and roughly $12.5 billion in free cash flow. Wedbush expects content amortization to ease through the second half of the year, supporting margin expansion.
