Netflix cofounder Reed Hastings to CEOs: Stop calling your teams family

Netflix co-founder Reed Hastings has urged the CEOs to stop describing their companies as families, warning that the metaphor creates false expectations. Hastings said the lesson came in 2001, when streaming giant Netflix, then a rental DVD startup, laid off one-third of its workforce after the dot com bust. “If you describe yourself as a family at a company, you better not ever do a layoff. You would never lay off two of your kids,” he told Semafor on The CEO Signal podcast.A championship team, not a familyHastings argued that companies should be seen as championship sports teams, where performance standards are kept high and roster changes are made to stay competitive. Netflix adopted this philosophy, introducing the “keeper test” — managers ask if they would fight to keep an employee or hire them again knowing what they know today.