An a time when many employers find themselves caught between their increasingly diverse and often progressive workforces and increasingly combative right-wing pundits and lawmakers, Netflix has plunged into America’s corporate culture wars.
In this round, the right celebrates.
It began last October when Netflix employees protested the company’s defense of a hugely popular special by comedian Dave Chappelle, who made remarks that some saw as offensive to the transgender community. Co-Chief Executive Ted Sarandos said he “screwed it up” in his efforts to communicate with disgruntled employees, but defended the show.
Last week, Netflix released updated culture guidelines that attempted to limit expectations for how quickly the company would respond to employees’ views on social and political issues in the future. “Depending on your role, you may need to work on titles that you find harmful,” the memo reads. “If you’re having a hard time supporting our breadth of content, Netflix may not be the best place for you.”
Fox News host Jesse Watters promptly praised the company for “not sinking into the woke dirt just to make a handful of people happy.” Billionaire cultural critic Elon Musk, who previously blamed Netflix’s business woes on the “wake-mind virus” — and recently declared he’s voting Republican — also tweeted his approval.
A Netflix spokesman said the company had been discussing the issues surrounding the memo for over 18 months, adding that the company had asked all employees to provide feedback and received over 1,000 comments that helped improve the draft had.
Days after the memo was released, Netflix said it would cut about 150 employees, or about 2% of its workforce, as it struggled with slower growth and a shrinking subscriber base. It wasn’t long before social media reports circulated that the company was also cutting dozens of contract writers, many of whom were part of its diversity communications initiatives, including Strong Black Lead with a focus on the Black community, Con Todo with a focus on Latinx, Asian American-focused Golden and LBTQ-focused must.
The cuts were the latest in a wave of layoffs that began about three weeks ago when Netflix laid off several employees from Tudum, a new fan-centric website; Many of the employees were women of color. Fox also claimed Netflix has canceled the series Anti-Racist Baby and the documentary Stamped: Racism, Antiracism and You.
Netflix noted that Stamped was a companion piece to Stamped From the Beginning, which is still ongoing. A person familiar with the company said that the company’s overall diversity numbers remain the same after the layoff and that all social channels have been impacted (not just those impacting underrepresented groups). The person added that the agency’s contractors have been cut because the company is changing the way it supports its publishing efforts, including moving some of the work in-house.
Netflix is being watched closely. Its policies are very influential; They have been called “Silicon Valley’s most important document of all time”. Therefore, the company’s moves and the reactions they evoke should be watched. How all of this will ultimately play out remains to be seen, but there are already lessons to be learned from the forces swirling around the company.
There is new evidence that workers will vote with their feet.
Managers should pay attention to surveys that say workers are willing to resign if they feel management is not speaking out enough on social and political issues. In the four months after the Chappelle controversy erupted, attrition rates reached an all-time high since the data began in 2009, according to Ben Zweig, executive director of Revelio Labs, whose research was featured in an MIT study of Factors Driving The Great Resignation .
Those deciding on layoffs, like all forms of corporate decisions, must consider their impact on all forms of diversity.
Companies can be sure that others are paying attention. Within hours of the news, reports circulated on social media claiming that Netflix’s layoffs had disproportionately hit departments and workers of color.
The culture wars have reached corporate America.
One company’s memo, previously published on Fox News, says it all: What employers say and do is now red meat for the Kulturkampf news cycle.
David Hopkins, a political science professor at Boston College who is working on a book on the political and social ramifications of the diploma gap, noted that Netflix is in a difficult position, being stuck between its employees and its content creators.
And while the popularity of certain positions will waver and wane, Hopkins believes one thing won’t change: Particularly in the creative or tech sectors, “any company in those areas will hire workers who are predominantly left-of-center and politicized in those areas are issues, and they will make demands, that not only affect a company’s internal politics, but also where the company publicly addresses issues important to young cultural progressives.”
Netflix is the latest example of leaders needing to be more transparent and aware than ever. You can be sure that as they move, many others will be watching.