The rise and fall of Netflix's unusual parental leave policy

Reassessing the leave policy, the company removed the “freedom and responsibility” section of its founding culture memo.

Entertainment and streaming giant Netflix made headlines some years ago when it introduced  most generous, extra ordinary parental-leave benefits, pledging to give new parents unlimited time off in their child’s first year. Although, Netflix couldn’t keep up with this promise.

The policy was in line with a core company value, “freedom and responsibility." But more employees than expected took advantage of the benefit, and Netflix ultimately found it unsustainable to continue with this policy.

The company has spent the past few years walking back the leave policy. The company issued vague and sometimes conflicting guidance internally without explicitly retracting the one-year benefit, The Wall Street Journal (WSJ) reported.

While introducing the policy in 2015, the streaming giant credited its culture, and founding principles such as employee freedom, for fueling much of its success. Netflix's core idea was that employees can be trusted to set their own boundaries.

Initially, the idea behind Netflix’s policy of offering unlimited parental leave in the first year was to be more generous than rivals and gain a competitive advantage in recruitment, the WSJ report added.

The company did not anticipate that many people would take a full year of leave. But such requests started coming in within 24 hours of the policy being announced. Some employees who had just returned from parental leave began asking managers if they could get an extension, according to the WSJ report.

In 2018, Netflix was taking action to rein in how people used the policy, proposing new language to clarify that most employees take four to eight months off, as some managers struggled to fill in for multiple employees on leave.

Reassessing the leave policy, the company removed the “freedom and responsibility” section of its founding culture memo.

As per the report, Netflix’s internal benefits page, a separate document, states employees can take parental leave within the first year of their child’s life or adoption, without specifying a length of time.

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After the Covid-19 pandemic subsided in 2022, there was a sea of layoffs in the company. The WSJ reported that some executives expressed concerns that it seemed like a lot of employees who were on parental leave or who had just returned from it were being targeted and let go.

Netflix said employees weren’t targeted for layoffs because they were on parental leave. A spokesman said the company did an analysis and found that only a very small percentage of those impacted by the layoffs were on parental leave.

Several employees said human-resources told them in the past years that six months is the actual allotment for parental leave, and beyond that, managers would have to approve extended time.