Netflix is preparing to lay off roughly 800 of its approximately 17,000 employees after losing ground to sites like YouTube, according to Hollywood's go-to source for insider information.

Puck's Matthew Belloni reported on the looming cuts Friday. He cited people familiar with the matter.

The company's share price has fallen more than 40 percent since December, when co-CEOs Ted Sarandos and Greg Peters were touring the iconic Warner Bros Studio lot.

The duo gave up on plans to buy the studio in February, after a higher, $111 billion offer from Paramount was accepted.

The bid was part of a hostile takeover attempt, since Warner's $82 billion offer had already been approved.

Netflix was paid a cool $2.8 billion for its troubles, a Warner Bros Discovery securities filing at the time revealed. Paramount closed the takeover on Tuesday.

HSBC analyst Mohammed Khallouf downgraded Netflix shares from a 'Buy' to 'Hold' rating as the deal inched to a close late last month, citing recent success from YouTube in reaching Americans' living rooms. 

He also cut his price target for the company's stock, from $96 to $76.

Wells Fargo analyst Steve Cahall did the same days before, lowering his company's rating to 'underweight' from 'equal weight,' and its price target from $80 to $57.

Cahall justified his decision with an estimate: that members, this year, have watched eight percent less than the same stretch in 2023. 

'Netflix has lacked big original series and it's showing,' Cahall explained. 'Breakout hits are a must for the stock to work again.'

Currently, shares are trading around $70 – down 42 percent this year, 22 percent year to date and 30 percent in the past six months.

The Daily Mail has approached Netflix for comment. 

The layoffs are part of a restructuring that could be announced as soon as next week, according to Belloni.

Netflix co-CEO Sarandos appeared to acknowledge the struggles during Bloomberg’s 2026 Screentime conference last week. 

'Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster,' he admitted on-stage on September 30. 'The business is great and growing fine.'

Unlike Netflix, Paramount had bid for Warner's cable assets as well. Netflix only wanted the film studio and Warner's streaming service, HBO Max. The latter is set to soon merge with Paramount Plus, execs revealed earlier this week.

Sarandos, at a point, was asked whether he regretted Netflix's part in the bidding war, to which he said: 'I think the plan was solid.'

'We won the deal at some point, so we think we priced it right - at our scale.'

'That was the top price point where I thought we could return value to our shareholders with that asset,' Sarandos added. 'Any more than that, I thought we’d be taking it into negative territory - even with our scale.'

At the time, Netflix had a market capitalization of around $400 billion.

Today, after losing ground to sites like YouTube, Netflix is worth less than $300 billion.

Netflix at the start of this year said it had more than 325 million subscribers across the globe. It had around 301.2 million in 2024, the company said.