As Its Stock Drops, Netflix's Employee Morale Is In Freefall, Too
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As Its Stock Drops, Netflix's Employee Morale Is In Freefall, Too

Netflix’s poor first-quarter earnings report has led to both a falling stock price and falling workforce morale.

After the streaming service disclosed a large subscriber loss in its earnings last week—triggering a roughly 40% decline in its shares since—many Netflix employees are reconsidering their futures at the company, with their confidence in its future direction shaken and their stock options looking increasingly skint, Bloomberg reported. Some employees have even requested new stock grants to make up for their losses, according to The Information.


The disappointing results have also led Netflix to evaluate its current spending levels, which will likely force employees to succeed with smaller budgets and fewer people. Bloomberg reported that Netflix is already restructuring teams in its engineering department—which have largely consisted of one leader overseeing a team of similarly-ranked people—to add seniority levels, a move considered to be a cost-cutting measure.

Other changes have already occurred in Netflix’s animation department, where the company has laid off Phil Rynda, its director of creative leadership and development for original animation, and several other employees, The Wrap reported last week.

Netflix has grown from 2,000 to 11,000 employees in the last eight years, according to Bloomberg, with most of its new hires based either internationally or in Hollywood. Co-founder Reed Hastings has boasted of a company culture based on freedom and responsibility—values that could now come under pressure amid heightened constraints.

Netflix disclosed its first net subscriber loss in over a decade in its earnings report, placing much of the blame on password-sharing—a practice it said it would be cracking down on. The company also indicated that it will be incorporating ads via a cheaper subscription tier to entice new subscribers.

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Sarah Favot

Favot is an award-winning journalist and adjunct instructor at USC's Annenberg School for Communication and Journalism. She previously was an investigative and data reporter at national education news site The 74 and local news site LA School Report. She's also worked at the Los Angeles Daily News. She was a Livingston Award finalist in 2011 and holds a Master's degree in journalism from Boston University and BA from the University of Windsor in Ontario, Canada.

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Ben Bergman/dot.LA

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Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

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ben@dot.la
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