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About

RH

Reed Hastings

06/10/25

@ The Knowledge Project Podcast

I use severance packages as a management tool to give managers permission to let go of employees, making it easier for everyone involved.

Video

TK

Netflix Founder: The Hidden Rules Behind Success | Reed Hastings

@ The Knowledge Project Podcast

Netflix Founder: The Hidden Rules Behind Success | Reed Hastings

06/10/25

Related Takeaways

RH

Reed Hastings

06/10/25

@ The Knowledge Project Podcast

I treat severance packages as a management tool to ensure we keep the right talent at Netflix.

RH

Reed Hastings

06/10/25

@ The Knowledge Project Podcast

We don't do performance improvement plans because they create a false sense of legal protection; instead, we prefer to offer generous severance packages.

MS

Michael Seibel

08/16/24

@ Y Combinator

When a founder is fired, it's reasonable to provide a small severance package, typically one to three months, but this is less common if they leave voluntarily.

RH

Reed Hastings

02/24/24

@ Stanford Graduate School of Business

The keeper test at Netflix encourages managers to assess whether they would fight to keep an employee; if not, we suggest offering a severance package to ensure a high-performance culture.

MB

Marc Benioff

12/10/24

@ 20VC with Harry Stebbings

Layoffs can be a crucial tool for CEOs to prepare their companies for the future, even though no one wants to make that decision.

BH

Ben Horowitz

04/21/17

@ Y Combinator

It's crucial to consider the reputational impact on your company when terminating an employee, especially regarding their ability to exercise stock options and the fairness of the process.

BH

Ben Horowitz

04/21/17

@ Y Combinator

Demoting an employee can be a better option than firing them, as it allows you to retain a hardworking individual while addressing performance issues without creating additional problems.

YC

Y Combinator Cast

04/28/17

@ Y Combinator

When terminating an employee, communicate clearly and directly without making excuses or apologies.

BH

Ben Horowitz

04/21/17

@ Y Combinator

When managing a company, it's essential to create incentives for employees to stay, especially if they face the risk of being fired.