Sources tell me that Netflix is preparing for a major round of layoffs, which would number up to 1,000 employees, or about 5 percent of the total workforce.

A major cause for the cuts are due to the streamer’s recent challenges with slowing engagement, a slumping stock price and several major downgrades from industry analysts. But I have also been told the cuts are seen internally as a way to pivot the company away from struggling divisions and realign efforts in reaction to changes in the entertainment business.

“When you look back at what the company did during the 2022 cuts, the moves it made paved the way for changes that turned out to be extremely successful in the long run,” I was told by a source. “That’s something to keep in mind as the cuts are announced.”

As for when that happens, sources I spoke with expected it to happen ahead of Netflix’s Q3 earnings call on Tuesday, October 20th. “It’s the chance to announce the reset in a way that will be bad, but hopefully will allow the company to take the hit and set out the future for investor,” my source added.