Content chief Bela Bajaria and film division head Dan Lin announced their departures shortly before the latest earnings report.
Netflix reported $12.9bn in revenue this past quarter, marking a 12pc growth year-over-year in line the streaming giant’s own forecast, while topping analyst expectations.
The growth was led primarily by an increase in memberships and pricing, Netflix said in a letter to shareholders late yesterday (20 October).
The streaming giant’s rate of revenue growth, however, has slowed over the past year. This time last year, the figure stood at 17.2pc. Meanwhile, the company expects an 11.5pc growth rate for Q4, compared to 17.6pc last year.
Netflix forecasts to bring in $13.4bn in revenue for the coming quarter, driven by a continued growth in memberships and pricing, it said. While full year guidance places income for the streaming giant at $51.1bn. Shares at the company are down nearly 6pc in overnight trading.
The lukewarm earnings come days after the company announced its largest headcount reduction in recent years. In a memo to employees last week, co-CEOs Greg Peters and Ted Sarandos said they are cutting about 1,000 jobs – amounting to 6pc of the company.
This was shortly followed by content chief Bela Bajaria and film division head Dan Lin announcing their exits from the company. Bajaria will be replaced by former Disney executive Peter Rice, who will oversee the film divisions until a new head is found.
Speaking at the investor call yesterday, Peters said that Netflix needs to be “incredibly disciplined” about its people and investments.
“When you’ve driven considerable top line growth…and you’re in a highly dynamic market that’s constantly changing, I don’t think it’s unusual then to find that there are some areas that we built quickly and we ended up over invested in or there are opportunities to adjust how we are operating,” he said in response to a question regarding the latest layoffs.
“Our business flywheel are working. There is no need for a fundamental shift in the strategy,” Sarandos said in the earnings call. He said that the company needs to focus on its US market, which has slowed in comparison to its other key regions across the world.
Forrester VP research director Mike Proulx said that layoffs and key changes in leadership don’t “exactly scream things are going ‘honky-dory’.
“While Netflix is growing, the pace of growth is slowing. That’s a wake-up call for the company that once defined the streaming market and is now in need of growth reacceleration.
“And now there’s even more reason to question just how much of that growth can come from advertising given the company just lowered its 2026 ad revenue forecast by 10pc.”
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