A short transcript excerpt from a YouTube video in which Reed Hastings role-plays with "Katie" (VP of content strategy) demonstrating how to fire someone respectfully using the "keeper test." Hastings explains the decision rule (would you try to change their mind if they quit?), gives brief, non-judgmental reasons ("a minute"), emphasizes generous severance (he cites about nine months' pay), and frames departures as non-personal (professional sports-team metaphor). The tone is pragmatic and empathetic; the segment models language and structure for difficult conversations.
Okay. So I understand that there's this keeper test and that adequate performance gets a great severance package, but firing someone in a respectful way can be really hard. If I were the person you needed to let go, can you demonstrate for the audience how you'd fire me?
Can I hire you instead? Let's think. Okay. What job do you have?
Oh, okay. I am the vice president, President of content strategy.
Okay. I'll do a little bit shorter version for time. But, Katie, I can see that you're really working hard and trying to make a big difference here. If I'm really honest with you, if you quit to go somewhere else, I wouldn't try to change your mind. And the reason that that is is because of this type of thing, the people that you've been hiring, I'd give you maybe a minute of detail. So enough that you can feel like there's something there, but not like a club beating you up. I'll call that a minute. And I say this is really hard for you, Katie. I understand that. But my commitment to the company is that if I wouldn't go to change your mind, then I have to give you a severance package. And the severance package is this. And, you know, it's relatively generous. Typically, like, nine months of compensation these days. So it's a lot.
Wow.
And, you know, if you think about person X or Y that are no longer at Netflix, we all have great relationships with them. And it's like a professional sports team where it really sucks to get cut from the team, but it's not an ethical judgment or a moral judgment or a judgment of you as a person.
Okay, well, thank you. Okay.
So at least in my theory, what we're trying to do is get away from. You suck.
Yeah.
Okay. And, like, you're a great person in this particular situation, I'm being honest as opposed to being hurtful. So one of the hardest things is to get managers to do the job, which is why we ended up doing big severance packages. The severance package is a bribe to the manager to get the job done, because managers almost by definition like people, so they really don't like firing people. But if there's a generous severance package, then it's not so bad. It's also great to tell stories of people who were let go and then changed the industry. Mike Bloomberg is probably one of the best known of that. Pushed out of Solomon Brothers and then formed Bloomberg. Right. In the same industry. The more it's socialized with all of you as if it was in sports, where it's not as much of a life kind of thing, it's a performance kind of thing, the better.
