Netflix is facing internal tensions between its Hollywood entertainment executives and Silicon Valley technology teams as layoffs, leadership changes and disappointing diversification efforts put pressure on the streaming giant to revive growth, according to a report by the Los Angeles Times published Oct. 26.
The company laid off about 6% of its workforce in October and reshuffled its senior entertainment leadership, including replacing chief content officer Bela Bajaria with former Fox and Disney executive Peter Rice. Several other programming executives also departed as Netflix faced increasing scrutiny from investors over its business strategy and competition from platforms such as YouTube.
The Los Angeles Times reported that disagreements have intensified since co-founder Reed Hastings stepped away from day-to-day management in 2023, leaving co-chief executives Ted Sarandos and Greg Peters to lead the company.
The tensions reflect a broader challenge for Netflix as it attempts to balance its technology-driven origins with its ambitions in Hollywood, where content spending and relationships with filmmakers, studios and talent remain central to its business.
Netflix declined to comment to the Los Angeles Times. However, a person close to the company disputed the characterization of an internal culture divide, saying the two chief executives bring complementary perspectives and make decisions together.
Dual-CEO structure faces scrutiny
Netflix established its dual-CEO structure in 2020, promoting Sarandos, its longtime content chief, to co-chief executive alongside Hastings. Peters, who previously served as chief operating officer, became co-CEO when Hastings stepped down in 2023.
READ: Netflix Chief Content Officer Bela Bajaria leaves after nearly a decade (October 19, 2026)
The arrangement was intended to combine Sarandos’ entertainment industry experience with Peters’ technology and product expertise. But former employees and industry sources told the Los Angeles Times that the leadership structure has sometimes contributed to conflicting priorities and slower decision-making.
According to the report, disagreements have emerged over how Netflix should promote its programs, allocate resources and pursue new business opportunities.
The structure is relatively uncommon among large publicly traded U.S. companies. Research firm Equilar found that about 1% of the largest 3,000 publicly traded companies in the country have co-CEOs, the Los Angeles Times reported.
Management experts, however, say shared leadership can be effective when responsibilities are clearly divided and executives work well together. Henning Piezunka, a management professor at the University of Pennsylvania’s Wharton School, told the newspaper that dividing responsibilities between two leaders can strengthen decision-making.
Gaming expansion creates divisions
Netflix’s push into gaming has become one of the clearest examples of the strategic disagreements described in the report.
Peters championed gaming as a way to diversify the company’s business and encourage subscribers to remain on the platform. Netflix began acquiring game studios in 2021 and invested heavily in the sector.
However, the initiative has struggled to deliver the expected results. In August, Netflix announced the closure of its gaming studios Night School and Moonloot, following the earlier closure of Boss Fight Entertainment.
READ: Netflix layoffs: TV executives Lisa Lang McMullen, James Oh among those cut (October 15, 2026)
The Los Angeles Times reported that Sarandos and Peters disagreed over the amount of attention and resources devoted to gaming, with concerns that the initiative was distracting technology and product teams from other priorities.
Netflix has also encountered disagreements over partnerships and programming decisions. A deal to bring French broadcaster TF1’s free channels to Netflix in France reportedly generated differences between the two executives before the partnership moved forward.
The experience has raised questions about how effectively Netflix can expand beyond its core streaming business while maintaining focus on its principal source of revenue.
Content promotion and technology priorities
Disagreements have also surfaced over how Netflix presents films and television shows to subscribers.
Historically, the company’s product teams managed trailers and thumbnails using consumer behavior data to determine how programs should appear on the platform. Under Sarandos, the marketing team gained greater control over promotional materials, according to the Los Angeles Times.
The shift reportedly led to disagreements between marketing and product employees over how to represent programs and increase audience engagement.
Another dispute involved Netflix’s agreement to stream NFL Christmas Day games in 2024. According to people familiar with the matter cited by the newspaper, technology employees were surprised that Sarandos’ team finalized the deal without consulting the product and technology executives responsible for delivering the streaming experience.
The concerns were heightened after Netflix experienced widespread technical difficulties during its November 2024 live broadcast of the boxing match between Mike Tyson and Jake Paul. The NFL Christmas Day broadcasts, however, were largely free of glitches.
The episode illustrated the coordination required when a company built around on-demand streaming expands into live programming, where technical failures can affect millions of viewers simultaneously.
Warner Bros. bid adds to investor concerns
Netflix’s failed attempt to acquire Warner Bros. Discovery has added to questions about its strategic direction. The company proposed an $82.7 billion acquisition of Warner Bros.’ streaming and studio operations late last year, but withdrew from the bidding process in February after Paramount’s offer increased, according to the Los Angeles Times.
The report said Netflix’s leaders appeared to send conflicting signals about the company’s appetite for acquisitions. Peters had previously expressed skepticism about major media mergers, while Sarandos later pursued negotiations with Warner Bros. Discovery.
Netflix ultimately abandoned the deal after Paramount increased its offer. The failed bid contributed to investor concerns about the company’s growth strategy, according to the newspaper.
The Los Angeles Times reported that Netflix shares traded at $109 before the Warner Bros. bid and closed at $65.85 on the Friday before publication.
READ: Netflix plans $25 billion share buyback after failed Warner Bros. Discovery bid (April 23, 2026)
Despite those pressures, Netflix remained profitable. Its third-quarter net income rose 44% to $3.7 billion, while revenue increased 12% year over year to $12.87 billion, according to the report. However, the company projected annual revenue toward the lower end of its guidance, citing a weaker advertising revenue forecast.
Netflix seeks renewed growth
Netflix has expanded beyond subscription streaming through advertising-supported plans, live sports and gaming. The company also has more than 325 million subscribers worldwide, according to the Los Angeles Times, making further growth in the saturated U.S. market increasingly difficult.
The company has invested heavily in original programming, with Sarandos overseeing much of its approximately $20 billion programming budget. Yet investors are seeking evidence that Netflix can sustain revenue growth as competition intensifies and subscriber gains become harder to achieve.
Media analyst Laura Martin of Needham & Co. told the Los Angeles Times that Netflix needs a plan to reignite growth beyond producing hit television programs, as rivals compete for audiences and advertising dollars. Sarandos said during a recent earnings call that Netflix did not need a fundamental change in strategy, while acknowledging the importance of developing more U.S. shows that appeal to audiences internationally.
For Netflix, the challenge is to preserve the technology and data-driven approach that helped it transform the entertainment industry while strengthening its position as a global content producer.
Whether the company’s dual leadership structure can manage those competing priorities will remain an important question as Netflix works to restore investor confidence and find its next phase of growth.