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Layoffs at Netflix have some staffers questioning company strategy and culture
By: Los Angeles Times | April 29, 2022

At Netflix, it has long been known that an “adequate performance gets a generous severance package.”

The Los Gatos, Calif., company views its roughly 11,300 employees as members of a pro-sports team, in which every player has to be a star performer, or else they’re gone, reflecting what the company calls a “keeper test.” “We’re a team, not a family,” Netflix says of its culture.

But what happens when the entire team’s performance is called into question?

Last week, Netflix said it lost subscribers for the first time in more than a decade, shedding 200,000 subscribers in the first quarter and expected to lose 2 million more this quarter. The disclosure unnerved investors, who wondered whether the streaming giant had lost its golden touch. Shares plummeted 35% on April 20, its biggest one-day decline since 2004.

Responding to its dramatic slowdown, Netflix said it would test ways to encourage people to pay for sharing passwords; put out better shows, films and games; and explore a lower-cost, ad-supported version of Netflix — an option the company had long resisted.

But the bleak subscriber numbers and the company’s response have stirred a mix of angst and uncertainty among many rank-and-file workers. Some are worried that the streaming heavyweight may have hired too fast and grown complacent as subscriber growth skyrocketed in the early days of the pandemic.

Others are skeptical about strategic shifts and concerned that Netflix’s distinct culture is fundamentally changing, according to former employees who spoke with The Times and comments posted on a private Netflix group on Blind, an anonymous forum for people with company-verified email addresses.

“Now we find ourselves at a company which increasingly looks like every other large tech company,” wrote one Netflix employee on Blind, citing changes in compensation policies that are said to favor hiring less experienced engineers at lower pay. “Would they still be doing this if they had hired a little more slowly over the last few years? I think not, so where is the accountability for leaders who made the bad decision to over hire?”

An overriding concern for many is job security, which was magnified Thursday when Netflix cut an undisclosed number of marketing-related positions, including from Tudum, a publication dedicated to promoting Netflix content. The pop culture site had been touted by former Chief Marketing Officer Bozoma Saint John, who exited in March. The company said Tudum remained “an important priority.”

After Netflix released its earnings, some of the workers laid off this week said they had been assured by managers that their jobs were secure.

“We were basically told, ’Don’t worry about it,’” said one former contractor who declined to be named because they signed a nondisclosure agreement.

Instead, they were told that Thursday was their last day and that they would receive two weeks’ severance.

“They are leaving a lot of people in an extremely bad position that came here to invest in a project that they sold to us,” the contractor said.

Further fueling the anxiety is the effect of the steep stock slide — Netflix shares have dropped 70% this year — on staff compensation. Employees can choose how much of their pay is tied to stock options.

Amid the tumult, rivals have received a surge in job inquiries from Netflix employees, said people familiar with the matter who were not authorized to comment publicly.

“Do you recommend putting work aside for a bit and start interviewing?” quipped one employee on Blind.

Netflix declined to comment for this story.

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