Already shunned by its subscribers, Netflix must face a legal attack from its shareholders. Internally, its employees are also gray, while the Los Gatos firm is gradually giving up on its libertarian corporate culture.
Netflix’s 200,000 fewer subscribers continue to do damage. This time, it is shareholders of the Los Gatos firm who are stepping up to the plate, as reported variety. Through a lawsuit in federal court in San Francisco, they accuse Netflix executives of violating US securities law by making “materially false and/or misleading statements“, while omitting “disclose material negative facts about the company’s business, operations and prospects“.
In the wake of the announcement of the decline in recruitment of subscribers, the action of Netflix had indeed fallen by 35%, losing 54 billion in market capitalization. A drop aggravated by the platform’s forecasts for the second quarter, anticipating two million fewer customers. Shareholders feeling cheated are asking for damages and interests that have not yet been disclosed, to compensate for “significant loss and damage“. They believe that Netflix and its senior executives “used devices, schemes and tricks to defraud” Investors.
the blues employees
The shareholders are not the only ones to experience badly the blow of less well of Netflix. Internally, employees would be morally harmed, according to Bloomberg. If hitherto a job in Los Gatos was a great accomplishment – especially since the company would pay rather well – the employees would have lost confidence in the long-term projects of their firm. Moreover, many of them have seen the value of their shares plummet from tens of thousands of dollars to sometimes nothing at all.
According to the American agency and the site The Information, there are currently more planned departures than ever before. Some employees also reportedly asked their management to give them more flexibility in choosing stock compensation. Hard to take for a company that has always put forward a very libertarian corporate culture. If between 2013 and 2021, it recruited with a vengeance to go from 2,000 to 11,000 employees, it has since committed to slowing down its hiring and closely monitoring its expenses.
Even the hierarchy of personnel has evolved. In its early days, Netflix would seek senior profiles for whom it would pay double or even triple their usual income. Today, he also recruits juniors, at obviously lower salaries. At the top of the pyramid, we should in any case see Reed Hastings and Ted Sarandos for a little while. It seems the captains had no plans to abandon ship.