NFLX Stock Dips Overnight: Retail Turns Bearish Ahead Of Earnings As Netflix Reels Under Growth Pressure

• Netflix is cutting 1,000 jobs, about 6% of its workforce, ahead of earnings.
• Netflix’s U.S. churn rose 16.6% in Q3, marking seven consecutive quarterly increases. 
• On Stocktwits, retail sentiment around the stock turned ‘bearish.’

Netflix (NFLX) stock slipped overnight as bearish retail sentiment builds ahead of third-quarter (Q3) earnings, with rising U.S. cancellations, declining viewing time and slowing growth raising concerns. The streaming giant’s decision to cut 1,000 jobs added pressure on its shares, which have been down 41% over the past year. 

Netflix stock inched 0.2% lower overnight, ahead of Thursday. The stock has gained 0.4% so far this week.  

Netflix Slashes 1,000 Jobs Ahead Of Earnings 

On Wednesday, Netflix slashed about 1,000 jobs, around 6% of its workforce, its biggest layoff since 2022, one week before earnings. With shares down more than 40% in 12 months and retail chatter souring, investors are now asking whether slowing engagement is merely a blip or a lasting trend.

The cuts, concentrated in product, tech, legal and human resources, arrive as Netflix wrestles with fading momentum: still profitable and still growing, but with viewing, hits and sales all losing steam.

In a company memo, co-CEOs Greg Peters and Ted Sarandos said fulfilling the mission “to entertain the world” requires discipline about where the company puts its people and resources. 

Netflix Users Are Drifting Away In The US 

Latest data from Apptopia points to a widening gap between North America and international markets, raising concerns about the streaming platform's ability to sustain audience interest.

Netflix's U.S. churn rate climbed 16.6% year-on-year in Q3, more than twice the 7.8% increase recorded in the previous quarter. Churn tracks users who were active in an earlier period but did not return to the app recently. The metric has risen for seven consecutive quarters, with Q3 delivering the sharpest quarterly increase at 8.5%. Asia-Pacific churn edged up just 1.3%, highlighting the contrast with North America.

Average daily time spent per active U.S. user reached 73.2 minutes in Q3. Though that exceeded the 70.2-minute figure from the same period last year, it declined from 77 minutes in the first quarter for a second straight quarter. 

On Tuesday, Huber Research downgraded Netflix to ‘Underweight’ from ‘Overweight’ and set a $70 price target, signaling a cautious view. 

What NFLX Retail Traders Are Saying 

On Stocktwits, retail sentiment around the stock fell to ‘bearish’ from ‘neutral’ territory the previous day. 

A user said, “Low sales growth pressure is not looking good into earnings. Imo.” 

Another user said, “No skin here but doesn't everyone feel like the obsession with the "hottest new show" is just over. I was an early cord cutter. Was obsessed  with Netflix in the early days. House of Cards was great.” 

 “Now it’s mostly garbage. All of it. Every service. No one wants to pay for ads or "diverse" reboots.” 

A third user pitched in, saying, “With inflation running so hot people will cut nflx , dis subscriptions.” 

NFLX stock has cratered 24% year-to-date. 

Also see: Why Did GME, BMBL, PFE Stocks Hit 52-Week Highs Today?

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