Reed Hastings, co-founder and CEO of Netflix, announced his retirement on Thursday after more than two decades with the company. While news of his departure comes as a shock, Hastings noted that Netflix has planned its next era of leadership “for many years” in the announcement, which was shared on the company’s blog.
In 2020, Netflix named Ted Sarandos, who has long led the company’s content efforts, as co-CEO alongside Hastings. Netflix described the change at the time as formalising how the company was already operating.
In Hastings’ absence, Netflix will maintain the co-CEO structure, promoting COO Greg Peters to the tandem role with Sarandos.
“It was a baptism by fire, given COVID and recent challenges within our business,” Hastings said of Sarandos and Peters taking the reins. “But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession.”
Hastings will stay on as executive chairman of the board, following in the footsteps of other prominent major tech company founders such as Amazon’s Jeff Bezos and Microsoft’s Bill Gates.
The announcement came just before Netflix reported its fourth-quarter earnings. In Q4, the company exceeded expectations by adding 7.7 million subscribers, far exceeding the 4.5 million expected. The company earned $7.85 billion in revenue during the fourth quarter of 2022, continuing its recent trend of slowing revenue growth.
Netflix’s stock price has fallen far short of previous pandemic highs in the last year, but the company has recovered from its midyear lows of $180 per share, trading at $315 before its Q4 report was released late Thursday.
The company launched an ad-supported subscription tier in November, and Thursday’s report provided the first real indication of how that new product might affect the company’s fortunes now that streaming’s early pandemic boom is over. In the report, Netflix called the launch of its lower-cost ad-supported tier a success for the fourth quarter, but noted that there was “much more still to do” with the new product.
A Netflix ad executive noted the variety of advertisers that the company has already attracted at CES earlier this month, describing it as a boon for consumers looking to offset their monthly costs with a Hulu-like ad-supported subscription.
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