5 reasons Netflix is struggling as it cuts about 1,000 staffers

Netflix co-CEO Ted Sarandos is looking to kickstart growth at the streaming giant.

Patrick T.

Fallon / AFP via Getty Images; Jakub Porzycki/NurPhoto via Getty Images Netflix shares have struggled amid slower engagement growth and intensifying competition.

The paid streaming leader laid off about 1,000 on Wednesday, its biggest round of cuts in years.

Here are reasons Wall Street is uneasy about Netflix's outlook.

Netflix is in a slump — and it's not just because you can't find a hot new show to watch.

The streaming titan's shares are down 42% in the last 12 months and have been nearly cut in half from their all-time high last summer.

Netflix had its biggest round of layoffs in four years on Wednesday, cutting about 1,000 employees, roughly 6% of the company.

So, what's going wrong? Netflix's viewership growth has slowed as free competitors like YouTube gain momentum, and initiatives like games and podcasts have yet to become breakout hits.

Add in the company's surprise bid for Warner Bros., which it later abandoned, and some investors are feeling on edge.

Co-CEOs Ted Sarandos and Greg Peters said in a memo that entertaining the world "requires us to be disciplined about where we prioritize our people and resources" but added that the company is still on track to reach its financial goals this year.

Many of Netflix's struggles aren't unique to the "Stranger Things" maker, which disrupted Hollywood by pioneering paid TV streaming and has a major influence over culture.

"Even the top streaming companies are not immune to stagnation and financial difficulties," said Ross Benes, a media analyst at EMARKETER, Business Insider's sister company.

Other entertainment giants like Disney and NBCUniversal have turned to layoffs recently.