Netflix co-CEO Reed Hastings is stepping down, effective immediately, the company announced Thursday. Chief operating officer Greg Peters will step up to co-CEO, alongside chief content officer Ted Sarandos. Hastings, 62, plans to stay on as an executive chairman.
Hastings co-founded Netflix with Marc Randolph, who served as the company’s first CEO. Randolph and Hastings founded Netflix in 1997, initially as a DVD-by-mail rental service. In 2007, they launched the streaming media service, which would eventually surpass the DVD-by-mail service. In 2013, Netflix expanded into producing its own content, starting with Lilyhammer and House of Cards. The company acknowledged the importance of its original content in 2020 by promoting Sarandos to co-CEO. Netflix now has about 230 million subscribers.
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In his announcement, Hastings said he started delegating other management responsibilities to Sarandos and Peters over the past two and a half years. “It was a baptism by fire, given COVID and recent challenges within our business. But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth,” Hastings wrote. “So the board and I believe it’s the right time to complete my succession.”
Sarandos and Peters can be “relied upon to put Netflix’s interests first,” Hastings wrote. “These qualities – combined with their complementary skill sets, deep knowledge of entertainment and technology, and proven track record at Netflix – create a unique opportunity to deliver faster growth and greater success long term with them as co-CEOs.”
Netflix also promoted Bela Bajaria to the chief content officer position and Scott Stuber to the chairman of Netflix Film. “We start 2023 with renewed momentum as a company and a clear path to reaccelerate our growth,” Hastings wrote. “I’m thrilled about Ted and Greg’s leadership, and their ability to make the next 25 years even better than the first.”
Hastings’ announcement was welcomed by Wall Street, as Netflix stock jumped 5% in after-hours trading, CBS News reports. “With Hastings remaining as Chairman, his expertise will still be available to the company,” GlobalData analysts said in a note. “However, there is a small risk that the culture of the company could change and become more cautious, especially as economic uncertainty persists. This would be similar to the shifts that have occurred at Amazon since Jeff Bezos stepped down.”
