Netflix co-CEO Ted Sarandos conceded Tuesday that the streamer must improve its U.S. programming, defending a leadership overhaul that replaced chief content officer Bela Bajaria with former Disney television chairman Peter Rice.
“I know that we could do better,” Sarandos told analysts on the company’s third-quarter earnings call. He said Netflix sees room to lift its slate, particularly in the U.S., where one breakout series can capture audiences worldwide. Sarandos, who ran Netflix content for more than two decades before becoming co-CEO, praised Bajaria’s decade of hits and her work building the international team behind local-language originals. He described Rice as an executive who “understands talent relations,” a priority as creators weigh offers from rival services.
The changes reach well beyond the top job. Film chief Dan Lin, his deputy Doug Belgrad and original series director Carolina Garcia are also out, according to Variety. Netflix is cutting about 1,000 positions, roughly 6% of its workforce, the deepest reduction since 2022. Lin’s successor will not be named until Rice arrives.
The financial results gave investors mixed signals. Revenue reached $12.87 billion, up 11.8% from a year earlier, a slowdown from 17% growth in the same quarter last year. Earnings of 87 cents per share beat the 82 cents analysts expected. Netflix also forecast a slower fourth quarter and said it will miss its ad sales target for the year. Shares fell after hours and have lost about a quarter of their value in 2026.
Netflix’s shareholder letter acknowledged the layoffs but offered no rationale for replacing its content leadership. Analysts supplied their own. BMO’s Brian Pitz read Bajaria’s exit as a sign that viewing softened further during the quarter. Jefferies estimates subscribers averaged 49 hours a month in the first half of 2026, down from 66 hours over the same stretch of 2023. Co-CEO Greg Peters called U.S. engagement solid and said the goal is to go “from very good to great.”
Not every analyst shares the gloom. Guggenheim’s Michael Morris kept a buy rating, noting the stock trades at about 22 times his 2026 earnings estimate, in line with the broader market. Rice will oversee scripted and unscripted series, film and live events across every region, and his first slate will show whether the reshuffle can turn that discount into momentum.
