Netflix unveiled its results for the first quarter of 2022 on April 19. The company suffered a loss of 200,000 subscribers and a drop in its stock market value of 25%. Faced with these signals, the morale of its employees is at half mast.
Netflix loses the trust of its employees
The streaming giant has long been considered the best employer in the United States. Ranked among the most popular brands with consumers, it is also renowned for offering a comfortable salary.
A union at Activision Blizzard soon to be officially recognized?
However, the latest quarterly results released have taken a toll on employee morale. The first loss of subscribers in 10 years has impacted employee confidence in the company’s long-term vision. There have never been more people wanting to leave Netflix than right now, current employees as well as former employees have reported to Bloomberg last week.
Rethinking its workforce
No more feeling of invincibility, Netflix looks more and more like its competitors like Disney +, Amazon Prime or even HBO Max. From now on, it is focusing on the management costs of its teams.
Between the end of 2013 and the end of 2021, the Californian company founded in 1997 by Reed Hastings and Marc Randolph grew from 2,000 to 11,000 employees. In its early days, it sought to hire talent by offering them a salary two or even three times higher than what they could claim on the market.
Restructuring has already begun in its engineering department. The horizontal organization chart of the streaming giant, with simply teams and directors above, will give way to the appearance of junior and senior levels… The objective is to reduce costs by adjusting salaries according to level.
Netflix employees seek compensation
In an innovative perspective, Netflix offers its staff the possibility of transforming part of their salary into stock options. CEO Reed Hastings has turned 98% of his $34.65 million earned last year into stock options.
After the company’s stock price fell 35%, their stock options lost all their value by falling below the strike price. People have lost tens or even hundreds of thousands of dollars. From then on, Netflix employees asked management for new stock awards to make up for the losses suffered last week.
To recover, Netflix is counting on increasing its prices and returning to one of its founding principles by considering the implementation of advertising on its platform. It also intends to recruit at a more measured pace and pay attention to lower expenses.