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Reed Hastings: Netflix Laid Off 40 People. Then Got More Done With Fewer People.

By Reed Hastings · Leadership · 1 min read

We went from 120 to 80. Expected to grind to a halt. Instead, we got more done. No dummy-proofing. Everyone going fast. That's when we discovered: with the right talent density, you barely need process.

Key Points

120 to 80 people — more got done, not less
With the right talent density, very little process is needed
The keeper test: would you fight to keep this person if they tried to quit?

There was no more dummy-proofing necessary. Everybody was going fast and everything was right.

The One-Third Layoff

Hastings: After we did this one-third layoff — 120 people to 80 — we expected to grind to a halt. It would take 80 people just to keep the lights on. But we got more done with only 80 people.

There was no more dummy-proofing necessary. Everybody was going fast and everything was right. We realized: with the right density of talent, there's very little process needed.

120 to 80. No more dummy-proofing. Everyone going fast. Very little process needed.

The Keeper Test

Hastings: We figured — let's not do a layoff every year. Let's focus on talent density. Managers each year have to testify that if a person were trying to quit, they would fight to change their mind.

Sometimes you find you have people working for you and if they quit, you'd be like — oh, that's pretty good. We wanted to proactively give them a generous severance package.

If they tried to quit, would you fight to keep them? If not — proactive generous severance.