Netflix shares fell as much as 3.5% in premarket trading on Friday after the streaming giant announced a major content leadership change and its largest round of layoffs in at least four years. The stock was down 2.4% in Friday premarket trading, continuing a difficult year that has seen shares decline 23% through Thursday's close.
Former Disney and Fox executive Peter Rice will become chief content officer on October 26, replacing Bela Bajaria, who is leaving after nearly a decade at Netflix. Rice will oversee the company's film and television slate as well as live events, with a mandate to improve slowing viewer engagement. He previously managed Disney's television operations, including ABC, FX, Hulu and its television studios, and was associated with acclaimed programmes such as Modern Family, Abbott Elementary and The Bear.
The leadership change was announced a day after Netflix revealed plans to cut about 6% of its workforce, or roughly 1,000 jobs. The combination of job cuts and the content leadership transition highlights the pressure on the company to improve operating efficiency while strengthening its programming pipeline.
Netflix co-chief executive Ted Sarandos praised Rice's industry experience, calling him one of the entertainment industry's most effective large-scale operators. However, Sarandos acknowledged the wider challenge at a conference last month, saying: "Overall, we're not growing as fast as I want us to, and we're working on making that move faster."
Investor concerns center on declining television viewing share and competition from YouTube and TikTok. Netflix is scheduled to report earnings on Tuesday, with upcoming projects including La Bola Negra and Narnia in focus. Wedbush reiterated a buy rating but cut its price target from $105 to $90, while BMO Capital maintained buy and lowered its target from $135 to $125.
