Netflix names Peter Rice content chief and cuts 1,000 jobs as 2026 ad revenue forecast falls to $2.7 billion
Bela Bajaria is out, Peter Rice is in, and the only scoreboard investors get is viewing hours that grew 2% in six months. Wall Street is splitting between a patient buy and a waiting sell.
Vincent Jiang · 3 min read
The week Netflix's−1.19% — Netflix, down 1.19 percent today growth stalled hardest, it changed who decides what 300 million people watch 56. Chief content officer Bela Bajaria is out after a decade; Peter Rice, the former chairman of Walt Disney Television, takes the job effective October 26, overseeing series, film and live events 56. Rice is not a finance hire: under him Walt Disney Television produced Shōgun and Only Murders in the Building, and his credits span prestige film and TV 3.
Film chief Dan Lin went too, alongside roughly 1,000 layoffs, about 6% of the workforce, the streamer's largest cut to date 68. Co-CEO Ted Sarandos defended the purge twice in two days, telling staff Rice is a rare operator who has "led TV networks, movie studios, streaming services" 3.
The ad business is the pressure point
Netflix cut its 2026 ad revenue forecast to about $2.7 billion from $3 billion, blaming slower rollout of its ad products 17. Advertisers buy hours, and hours went flat: members watched more than 97 billion hours in the first half of 2026, up just 2%, while live events took just over 5% of content spending for about 1% of viewing time 1.
Netflix revenue growth has slowed for three straight quarters, from 17.6% to 11.8%
Data
| Revenue growth, year over year | |
|---|---|
| Q4 '24 | 16% |
| Q1 '25 | 12.5% |
| Q2 '25 | 15.9% |
| Q3 '25 | 17.2% |
| Q4 '25 | 17.6% |
| Q1 '26 | 16.2% |
| Q2 '26 | 13.4% |
| Q3 '26 | 11.8% |
Jefferies−2.50% — Jefferies, down 2.50 percent today estimates monthly viewing per member fell from about 66 hours in early 2023 to 49 hours this year, down roughly 26% 9. Q3 revenue rose 11.8% to $12.87 billion, and Q4 guidance of $13.44 billion missed the $13.51 billion consensus 810.
Netflix growth is decelerating toward single digits
- FX-neutral revenue growth
- Estimate
Data
| FX-neutral revenue growth | |
|---|---|
| Q1 2026 | 14% |
| Q2 2026 | 12% |
| Q3 2026 | 11% |
| FY2027 (estimate) | 8.5% (8–9%) |
The complication is the scoreboard. Netflix stopped reporting subscriber counts in 2025 and cuts its viewing report to annual from 2027 19. Investors must underwrite Rice's unannounced slate with almost no instrument to read. Sarandos conceded the gap himself: "I know that we could do better, especially in the U.S." 3.
Wall Street splits on the wait
BofA−0.83% — BofA, down 0.83 percent today kept its Buy but cut the target to $90 from $105, saying the quarter "did little to change the narrative" 1. Wolfe went to Peer Perform, arguing the leadership change could delay the fix 2. Needham cut to Hold, expecting single-digit growth in 2027 as YouTube−0.65% — YouTube, down 0.65 percent today tightens its grip 2. Wells Fargo−0.82% — Wells Fargo, down 0.82 percent today holds Sell at $57, and the stock now carries two Strong Sell ratings where August carried none 1.
The cash is real, but it does not watch anything
The counterpoint is cash: a record $4.8 billion of Q3 buybacks, $10.8 billion this year against $9.5 billion of free cash flow 1. Buybacks support the share price, but they do nothing for engagement, and engagement is what the ad forecast depends on. Rice also inherits Greta Gerwig's $280 million Narnia, pushed from late 2026 to February 2027 after a poorly received trailer 4.
The trade is a patient re-rating against capitulation, and the next hard reading is the 2027 annual viewing report 9. When this desk covered the Warner Bros. auction on October 22, the argument was that Netflix's $20 billion content engine had to invent savings; that savings case now runs through Rice's slate 11. If hours accelerate once his first bookings are announced, the bulls' re-rating has its proof. If hours stay near 2% growth, the single-digit 2027 view takes over and the discount deepens 11.
What happens next
NFLXDoes the February 2027 release land after the poorly received trailer?
The case for
BofA stays Buy at $90, calling Rice a proven operator behind Shōgun and Only Murders in the Building
The case against
Two Strong Sell ratings where August had none; Wolfe and Needham both cut, citing a delayed fix and YouTube pressure
- Mon Oct 26Peter Rice takes over as Netflix chief content officer.
- February 2027Release of Greta Gerwig's $280 million Narnia film.
- 2027Netflix's first annual viewing report. Does viewing growth accelerate under Rice's slate or stay near 2%?
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