{"id":5500,"date":"2026-08-18T15:43:59","date_gmt":"2026-08-18T15:43:59","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=5500"},"modified":"2026-08-18T15:43:59","modified_gmt":"2026-08-18T15:43:59","slug":"reed-hastings-says-he-learned-why-companies-arent-families-after-laying-off-one-third-of-netflix-you-would-never-lay-off-two-of-your-kids","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=5500","title":{"rendered":"Reed Hastings says he learned why companies aren\u2019t families after laying off one-third of Netflix: \u2018You would never lay off two of your kids\u2019"},"content":{"rendered":"<div>\n<p>For Netflix cofounder Reed Hastings, the experience drove home a lesson about how to think about a company: It may be a tight-knit team, but it isn\u2019t a family.<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=5498\">2 Penn State frats were main suppliers in \u2018upper level trafficking\u2019 cocaine ring, authorities say<\/a><\/p>\n<p>\u201cPeople respect great teams, and they respect families and how we operate,\u201d Hastings recently told <em>Semafor<\/em>. \u201cBut if you describe yourself as a family at a company, you better not ever do a layoff. You would never lay off two of your kids, right? Then people get very cynical if you say it\u2019s a family but don\u2019t operate that way.\u201d<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>Netflix soon found a path forward, capitalizing on the rise of DVD players\u2014pivoting to a subscription-based DVD delivery service\u2014and going public in 2002. But Hastings argued that getting too close makes employees feel protected, even when their performance falls short.\u00a0<\/p>\n<p>\u201cWe realized, wow, maybe we should do a one-third layoff every year,\u201d the 65-year-old said. \u201cAnd of course that\u2019s impractical\u2014but we said, how about if we keep the bar high and really think about us as a championship sports team rather than a family.\u201d<\/p>\n<p>Hastings, who has an estimated net worth of $4.4 billion, served as Netflix\u2019s CEO from 1999 to 2023. He then became chairman but stepped down earlier this year.<\/p>\n<h2>Netflix managers use a \u2018keeper test\u2019 to identify top talent\u2014and \u2018part ways quickly\u2019 with employees they wouldn\u2019t fight to keep<\/h2>\n<p>Like most major companies, Netflix has endured rounds of layoffs throughout its history. But Hastings said the goal hasn\u2019t been simply to cut costs or reduce headcount. It\u2019s about making sure the company has the right roster to compete\u2014and making changes when it doesn\u2019t.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>\u201cIf you say it\u2019s like a championship sports team and we\u2019ve got all these competitors and we want to win the championship, then people understand why the coaches make changes throughout the year to try to do their guess of the best way to win the championship.\u201d<\/p>\n<p>Today, Netflix defines success by performance, not seniority, tenure or loyalty. Managers are also expected to regularly apply what Netflix calls its \u201ckeeper test\u201d to their employees.<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>\u201cWe expect leaders to be strong developers of talent,\u201d it says on the Netflix website. \u201cAnd to ensure they have the right player at every position, we ask them to apply what we call the \u2018keeper test\u2019\u2014asking \u2018if X wanted to leave, would I fight to keep them?\u2019 Or \u2018knowing everything I know today, would I hire X again?\u2019 If the answer is no, we believe it\u2019s fairer to everyone to part ways quickly.\u201d<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>Netflix pairs high expectations with flexibility. Salaried employees aren\u2019t bound to traditional 9-to-5 work schedules or even a prescribed vacation calendar. Netflix also offers unlimited paid time off and parental leave.<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=5496\">Current price of oil as of August 18, 2026<\/a><\/p>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<p>\u201cWhile time away may be observed differently depending on your location and role, we believe in taking the time you need so you are bringing your best to work,\u201d Netflix\u2019s website says.<\/p>\n<h2>From Airbnb to Shopify, CEOs are pushing back on the \u2018company as family\u2019 mentality<\/h2>\n<p>Hastings is hardly alone in concluding that the family-business metaphor can create problems\u2014particularly when companies have to make difficult decisions about their workforce.<\/p>\n<p>Airbnb CEO Brian Chesky has admitted he learned that lesson during the pandemic. As he laid off roughly 25% of his workforce, he told employees he had a \u201cdeep feeling of love for all of you.\u201d Looking back, he said he realized the language blurred an important distinction.<\/p>\n<p>\u201cI wrote that letter fairly quickly,\u201d Chesky said on the <em>ReThinking<\/em> podcast in 2024. \u201cI didn\u2019t have a lot of time, and so I wrote what I felt, and that\u2019s what I felt, and I was pretty emotional when I was writing it. And it is true that a company\u2019s not a family. In fact, we had to make that pivot.\u201d<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<p>\u201cWe used to refer to ourselves as a family, and then we did have to fire people, or they\u2019d have to leave the company, and you don\u2019t fire members of your family,\u201d he added.<\/p>\n<p>Shopify CEO Tobi L\u00fctke reached a similar conclusion. In 2021, he warned managers against describing the e-commerce company as a family, arguing that doing so could make it harder to hold employees accountable.<\/p>\n<p>\u201cThe very idea is preposterous. You are born into a family. You never choose it, and they can\u2019t un-family you,\u201d he said in a letter published by <em>Business Insider<\/em>.<\/p>\n<p>L\u00fctke specifically pushed back against employees using the term \u201cShopifam,\u201d especially among younger employees.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>\u201cThe dangers of \u2018family thinking\u2019 are that it becomes incredibly hard to let poor performers go,\u201d he added. \u201cShopify is a team, not a family.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=5494\">The Buss family wants an \u2018exit gracefully.\u2019 Jeanie Buss says no<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Elite companies can\u2019t operate like families, according to Netflix\u2019s Reed Hastings\u2014a mindset that helped turn it into a $315 billion entertainment giant.<\/p>\n","protected":false},"author":1,"featured_media":5499,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[574],"tags":[],"class_list":["post-5500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-culture"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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