Netflix founder and co-CEO Reed Hastings announced Thursday that he would step down after more than two decades at the company.

While news of his departure comes as a shock, Hastings noted that Netflix has planned its next era of leadership "for many years" in the announcement, which was shared on the company's blog.

In 2020, Netflix named Ted Sarandos, who has for years led content efforts there, as co-CEO alongside Hastings. At the time, Netflix described the move as formalizing how the company was already structured.
Netflix will maintain its co-CEO structure after Hastings' departure, as it promotes COO Greg Peters to share the job with Sarandos.

It was a baptism by fire, given COVID and recent challenges within our business," Hastings said of Sarandos and Peters taking the reins.

"But they have both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it's the right time to complete my succession.".

She stated that he would continue to be part of the company but on the board as an executive chairman. It's actually a practice observed among even key founders of successful IT companies like Amazon founder, Jeff Bezos and its equivalent, Bill Gates for Microsoft.

This news comes just before the release of Netflix's earnings for its fourth quarter. The company easily topped Wall Street expectations in Q4, adding 7.7 million subscribers — way more than the 4.5 million it had predicted. The company also raked in $7.85 billion during the last quarter of 2022. The trend here is to continue with the slowdown of revenue growth.

Netflix has said it added millions of new subscribers in Q4 as some of the content that the streaming platform streamed this period turned out to be the most excellent, such as the reboot of the "Addams Family" entitled "Wednesday," the standalone "Knives Out" sequel dubbed "Glass Onion," and the royals documentary dubbed "Harry & Meghan.

Like most of tech, Netflix's stock price has fallen well short of previous pandemic highs over the last year, but the company did recover from its midyear lows of $180 a share, trading at $315 before its Q4 report hit late Thursday.

The company launched an ad-supported subscription tier in November and Thursday's report provided the first real glimpse into how that new product might change the fortunes of the company now that the early pandemic boom times are over. According to the report, Netflix said it called the launch of its lower-cost ad-supported tier a success for Q4 but said it has "much more still to do" around the new product.

Speaking at CES earlier this month, an ad executive for Netflix mentioned that the company has attracted a wide range of advertisers already and that's something of a windfall to consumers who are eager to offset their monthly costs by having a Hulu-like ad-supported subscription.