It was no secret that Netflix was going to be swinging an ax this week. Word began to trickle out over the weekend that what DEADLINE’s intrepid Nellie Andreeva, among others, reported just before dawn yesterday would be happening. The basics she covered in her introduction were stark but not unexpected:
Netflix has initiated a major round of layoffs Wednesday, eliminating about 6% of its global staff or some 1,000 jobs for its biggest round of job cuts in four years. The product, tech, legal and HR teams are among the most impacted by the cuts, which have been expected as the company faces slower growth and increased competition.
The share price of the giant streamer has dropped more than 40% over the past year (off 25% year to date) as Wall Street has increasingly scrutinized its viewer engagement, which increased only 2% over the first half of the year to 97 billion hours viewed. The stock is trending down about 1% in late-morning trade today at just under $70, a big comedown from a 52-week high of $125…Sarandos addressed the topic of engagement earlier this month at a Bloomberg conference. “Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster,” he said.
But I don’t think even those directly affected were prepared for the degree of corporate-speak the actual memo from Teddy Bear and his co-honcho Greg Peters which the intrepid one “exclusively” obtained a copy of and shared with her readers:
“Decisions like these are never easy, and we don’t take them lightly,” the CEOs wrote. “Our mission — to entertain the world — is ambitious, and delivering on it requires us to be disciplined about where we prioritize our people and resources. Our business is strong and growing, and we remain on track to deliver our full-year forecast. We’ll continue to invest aggressively in high-impact areas to improve our service and further drive growth and innovation. Doing that means making focused choices across the business so we can keep delivering for our members, partners, employees, and investors.”
If you are leaving, please know that we will support you throughout this transition and make sure you have as much clarity and context as possible. We also want to say thank you. What you’ve built, and the care you brought to Netflix, have made a lasting difference and we will always be grateful.
And as Andreeva’s staff began to break the news of some of the specific lives among the 1000 names that drew the short straw this go-round it became increasingly apparent exactly how tone-deaf and hollow those words were. Especially in light of the specific goals that those that remain have had laid out for them.
For one, Andreeva herself pointed out one of the pivots that the team leaders had already put into play:
The company has been raising its profile in theatrical distribution with its upcoming features The Mis-adventures of Cliff Booth, La Bola Negra and Possible Love all set for theatrical release before hitting the platform along with Greta Gerwig’s Narnia: The Magician’s Nephew, which hits Imax screens in February of 2027 ahead of a wide release.
Yet minutes after this she and Anthony D’Alessandro dropped this news:
Doug Belgrad is departing Netflix where he has been Vice President of Film for more than two years. His exit, which was confirmed by the streamer, is part of the major layoffs at Netflix today that are impacting 1,000 people. Ironically, Belgrad was Head of Film Dan Lin‘s first hire after a round of layoffs when Lin replaced Scott Stuber and restructured Netflix’s film department.
And mere minutes later this:
Another film executive is leaving Netflix as part of the ongoing layoffs at the streamer Wednesday. Sheroum Kim, who joined in January 2019 as Director of Independent Films, has been impacted by the cuts, Deadline has learned. We have also confirmed that Netflix features manager Sebastian Hernandez, who reported into Kim, is also departing.
If one objectively judges the track records that they turned in over their tenures, one might conclude that their best efforts fell short of expectations. How realistic those expectations may have been is debatable. But if these are jobs being eliminated completely, pray tell who’s gonna actually execute the game plans to accompany their stated expansion goals?
The same can be said for the moves related to these departures on the TV side which she got around to somewhat closer to her first coffee break:
Names of scripted television executives leaving as part of the ongoing Netflix layoffs, which are impacting about 1,000 employees, have started to emerge. Those departing include four Director-level execs — Lisa Lang McMullen, James Oh, Carolina Garcia and Andrew McQuinn — as well as a few Managers, including Dan Evans, Jason Pan and Aaron Davidson…The executive changes in Netflix’s scripted operation come as the streamer is searching for its next big hit that would capture the zeitgeist the way shows like Stranger Things, Squid Game, Bridgerton, Queen’s Gambit, Wednesday and Baby Reindeer have. It has been a year and a half since the last new series to have that level of cultural impact, Adolescence, came out... (M)any of its returning series have been posting season-to-season viewership declines.
Again, I feel personally for these seemingly dedicated people–indeed, I have a history with Oh going back to his salad days as an inquisitive research executive at FOX Broadcasting. But as Andreeva pointed out in her original work, the company had not only not gotten their expected results from their efforts, they had already been moving in a different direction:
The streamer has been shifting strategy by leaning into live events including sports — with upcoming NFL Thanksgiving Eve and Christmas Day games and the Tyson Fury vs. Anthony Joshua boxing match — as well as video podcasts and creator-driven content.
So were these departures strictly done to appease investors or may they have related to the choices they presented their subscribers didn’t click and that, like so many of their competitors, they’ve decided that sports and unscripted are sounder and potentially less costly strategic bets? This was probably worthy of some sort of clarification, especially since these people now have to go out and try to find work.
But one that somehow Andreeva et al missed–but was confirmed by a former colleague–was the departure of scheduling guru Andy Kubitz. You may recognize his name because we’ve mused about him before. I was exceptionally impressed with him when we collaborated on an otherwise unfortunately greenlit series called NOTORIOUS when he was doing his thing for ABC a decade ago. And I once again sung his praises just last month when I made sure to note that the relative success of its reboot of A DIFFERENT WORLD was due in large part to his prescient timing for its launch that drew heavily on his linear legacy.
You bet I’m biased toward mensches with research backgrounds who know how use their savvy to outmaneuver their competitors. It’s that sort of sechel that determined executives like Sarandos and Peters should have been tapping into even more often if indeed their stated goals were moving the company forward were actually motivated by a sincere desire to win–not merely to meet investor expectations and optimize their bonuses. Remember those KPIs that I mentioned as late as yesterday? Human beings ultimately have to make sense of them and make judgment calls. Beancounters or, worse still, AI models cannot be counted on to accurately prioritize which ones matter more since that’s a fluid process. Humans as seasoned and successful as Andy Kubitz become all the most necessary in this sort of environment.
But yeah, guys, I suppose your stock price of late points out how well your strategic vision has been panning out–in spite of the fact that you still have the most eyeballs from paying subscribers of anyone playing in your sandbox. So I guess this next go-round will need to rely on folks like you trying to see the forest through the trees. The one that involves having an accurate handle on the what and whys of your faceless revenue sources is one even a lumberjack like you can’t be hacked away as easily as head count.
Until next time…