Memo to Reed Hastings: Your Up-Or-Out Netflix Culture May Have Reached Its Limits

Netflix's Reed Hastings
(Image credit: re:publica/Gregor Fischer)

Netflix has long fetishized its unique culture, notable for lavish pay for demanding work (even by Hollywood’s over-the-top standards) but also for its oft-stated willingness to move people out the door rather suddenly when it decides they no longer are the best fit for their job. 

Departures are cushioned by hefty severance packages (four months’ pay is typical, the company says). However, since the pandemic hit, the list of prominent ex-Netflix employees is getting notably longer. The question is whether the turnover at the top is a function of Netflix’s exacting high standards, greener pastures elsewhere, pandemic existentialism, or simmering issues with the streaming company’s direction and handling of controversies amid ever-stiffening competition.

The exit list of top talent now includes long-time programming executive Cynthia Holland, the departure to Deluxe of talent relations and awards chief Anna Lee, and the short tenure of VP of original series Channing Dungey, who became chairman of Warner Bros. TV Group after less than two years at Netflix. And earlier this month, high-profile Chief Marketing Officer Bozoma Saint John departed, less than two years after her arrival, from a gig that paid her a reported $4 million a year.

Of those departures, perhaps Saint John is the least surprising. She’s whirled through a string of high-profile gigs since 2014, when Jimmy Iovine recruited her from PepsiCo to handle marketing at Beats Music … which soon was acquired by Apple, where her bopping presentation at a developers conference created a sensation. In the five years since leaving Apple, Saint John has been CMO at Uber and then Endeavor before joining Netflix in August, 2020. 

Now Saint John is gone from Netflix, too, succeeded by VP of marketing for the U.S. and Canada Marian Lee, formerly a long-time Spotify exec.  

“I came to Netflix with a surplus of enthusiasm and creative energy and am immensely proud of the campaigns we inspired that sparked global conversations,” Saint John said in a statement. “It’s been a transformative two-year experience for which I will always be grateful.” 

The peripatetic Saint John may be a special case, and it’s worth noting that being a CMO anywhere is not a job for long-timers. Last year, while CEO tenures stretched to an average 80 months, CMOs on average lasted just half as long, the shortest run in more than a decade, according to a study by leadership advisory firm Spencer Stuart

CMO tenures at the 100 most-advertised companies were even shorter, just 25.5 months, which the study attributed to the pandemic pushing many veterans to retire and others to struggle with the demands of a challenging and fast-changing #WFH environment. It’s possible that’s part of the Netflix job’s challenge, too.

Co-CEO Reed Hastings has long touted Netflix’s vision to create an “amazing and unusual employee culture” focused on constantly building a “dream team,” as laid out in extensive detail with a group document in its jobs section that “hundreds” of employees contributed to. The document is remarkable, a thorough critique and rejection of the operating credos (explicit or implicit) of many other companies, especially in in Silicon Valley and Hollywood. 

“We don’t buy into the lore of senior leaders, who are so involved in the details that their product or service becomes amazing,” the “Netflix Culture” document says. “The legend of Steve Jobs was that his micromanagement made the iPhone a great product. Others take it to new extremes, proudly calling themselves nano-managers. The heads of major networks and studios sometimes make many decisions in the creative process of their content. We do not emulate these top-down models because we believe we are most effective and innovative when employees throughout the company make and own decisions.”

That approach has been tested lately, after 2020’s massive subscriber gains turned into 2021’s near-stagnation even while a string of high-profile competitors launched with deep libraries, deep pockets and commitments to spend just as much for high-profile shows. 

Employee blowback erupted last summer after Netflix released a Dave Chappelle comedy special, The Closer, where the comedian once again criticized trans people with comments that angered LGBTQ+ people and their many allies. 

In the resulting internal pushback, the company ended up suspending three staff members, including engineer and prominent trans employee Terra Field, who virtually crashed a PR strategy meeting. Multiple other protests, walkouts, and “firm demands” soon followed. Later, an employee was fired for leaking financial documents around Netflix’s hit Squid Game (documents which are typically widely available internally under Netflix’s radical openness approach). 

In the months after the Chappelle controversy, Co-CEO Ted Sarandos issued a mea culpa, telling trade publications that he “screwed up” with “a blanket statement that didn’t land as it was intended.” Chappelle, meanwhile, got another Netflix deal for four Home Team specials featuring comics of his choice.  

Given the Chappelle controversy and Hollywood’s sorry history with diversity and inclusion, it’s also worth noting all of those recently departed executives I previously mentioned are female, and three are people of color.

And there are other reasons some people leave Netflix. 

Sr. Software Engineer Michael Lin quit his $450,000-a-year Netflix job last year, then wrote about it on Medium. He listed three reasons for the departure, made against the advice of family and friends: 1) for all its attention to vertical organizational opportunities, the company wasn’t set up to enable horizontal ones, like Lin’s desired transition to product management, 2) waning motivation led to waning performance, and 3) a life reassessment amid the pandemic’s depredations.

David Bloom

David Bloom of Words & Deeds Media is a Santa Monica, Calif.-based writer, podcaster, and consultant focused on the transformative collision of technology, media and entertainment. Bloom is a senior contributor to numerous publications, and producer/host of the Bloom in Tech podcast. He has taught digital media at USC School of Cinematic Arts, and guest lectures regularly at numerous other universities. Bloom formerly worked for Variety, Deadline, Red Herring, and the Los Angeles Daily News, among other publications; was VP of corporate communications at MGM; and was associate dean and chief communications officer at the USC Marshall School of Business. Bloom graduated with honors from the University of Missouri School of Journalism.