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Netflix co-CEO Ted Sarandos said late Tuesday that its recent staff and leadership exodus will help the company “do better” amid slowing growth and rising pressure at the company.
In recent days, Netflix has revealed the departures of chief content officer Bela Bajaria, film chief Dan Lin, VP of film Doug Belgrad, and about 1,000 other employees—representing about 6% of its total workforce and the largest set of cuts since 2022. Former Disney executive Peter Rice will fill the role of Bajaria, who helped lead Netflix’s negotiations with major sports leagues.
Speaking during a quarterly earnings report, Sarandos put a hopeful spin on the changes and lauded the arrival of Rice, though he acknowledged “we do need better execution in the U.S.”
“There is a lot to be excited about, but I know that we could do better, and we want to build on that momentum,” Sarandos said. “We see an opportunity to take that slate [of content] to the next level, especially in the U.S. where we can have an outsized impact.”
Greg Peters, the other Netflix co-CEO, added that the staff cuts come from the need to “make hard tradeoffs” in service of the company’s mission “to entertain the world while building a wildly successful business.”
“Sometimes, the team needs a forcing function, the company needs a mandate that requires the whole organization to ask hard questions about where can we be more efficient, where can we make tough decisions about where we can trim or redirect where we’re investing,” Peters said. “We do not take these decisions lightly.”
Halftime Spectacle
Separately, Netflix and the NFL said Tuesday that Irish rock superstars U2 will be the halftime entertainment of a newly created Thanksgiving Eve game on Nov. 25 at SoFi Stadium between the Packers and Rams. That matchup, designed in part to expand the league’s presence over a highly watched holiday weekend, is a key component of Netflix’s newly enlarged NFL rights package, which includes five games this season.
That broadcast will likely draw more viewers than a Week 1 Netflix broadcast of a 49ers-Rams game from Australia, which averaged 18.5 million viewers in the U.S.
The U2 performance will also happen less than two weeks after the release of its upcoming album, Carnaval de Luz.
“There’s a reason U2 has headlined stadiums for decades: they don’t just perform, they deliver iconic moments audiences remember forever,” Sarandos said. “We’re thrilled that they’ll bring that same magic to the NFL stage on Netflix.”
In addition to the Thanksgiving Eve game, Netflix’s fourth-quarter live sports will include an NFL doubleheader on Christmas Day and the Tyson Fury–Anthony Joshua boxing match on Dec. 11.
Earnings Report
Netflix also said it generated $12.87 billion in third-quarter revenue, up 12%, while net income grew 44% to $3.67 billion. The revenue figure was generally in line with Wall Street expectations, while the net income surpassed them.
The results also extended a growth wave in the company’s core numbers, but investors continue to be on the hunt for far stronger results. Netflix shares are down by nearly 25% this year and by 44% over the last 12 months. Despite the continued double-digit-percentage increases in quarterly revenue, Netflix’s increase in the latest period was its lowest in three years, signifying a pattern of declining growth.
Future forecasts from the company point to a continuation of that trend in the near future. Additionally, Netflix said the fourth quarter will have a lower operating margin because of costs associated with the staff cuts.
As a result, investors pushed Netflix shares down by an additional 6% in after-hours trading.
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