Netflix fired its Chief Content Officer and says it’s doubling down on premium originals. Will that save its stock?

Netflix‘s stock has lost nearly half its value in the last 12 months (down from ~$124 to $68), and it sank yet further this week, bottoming out at a two-year low after the streamer posted Q3 earnings and lowered its profit projections for the fourth quarter.

This comes just after Netflix announced layoffs of 6% of its workforce, cutting around 1,000 people from product, tech, legal, and HR departments (and, btw, promising that “[o]ur business is strong and growing, and we remain ​on track to deliver our full-year forecast”).

It also fired longtime Chief Content Officer Bela Bajaria and replaced her with Peter Rice, Disney‘s former General Entertainment Chairman. Film chief Dan Lin is out as well.

Co-CEO Ted Sarandos said Netflix tapped Rice because he “understands talent relations.”

“In a competitive market, creative talent have choices of where they want to work, and we want Netflix to always be the place that they love to do the best work of their life,” he said. “Peter is the exact right person to lead those efforts in the U.S. and around the world. Now, that’s a key aspect of what I believe Peter can improve on looking forward.”

Sources familiar with the matter told Variety Bajaria (who was a big player in securing the streamer’s subscriber-base-building deals with WWE and the NFL and was not generally considered under threat for ousting) is being used as a “scapegoat” for Netflix’s issues.

“People always blame the content,” one person said, “but you don’t lay off 1,000 people unless there’s a big problem with the business model.”

Another added, “The problem isn’t engagement. It’s that the only lever to pull for revenue growth is raising the subscriber price. How’s that Bela’s problem? Where’s the CFO and the CEO?”

Well, the co-CEOs–Sarandos and Greg Peters–are on Q3 cleanup. Sarandos gave YouTube a rare nod earlier this year, saying it “is TV” and that Netflix and all other entertainment companies are competing with it.

Now, Sarandos says Netflix plans to focus more on its core business: producing premium original TV shows and movies.

This is the one area where YouTube doesn’t compete. After a stint trying to produce premium TV, it shuttered its originals and zeroed in on UGC, leaving the space open for Netflix productions like Stranger Things, Squid Game, Sense8 (I liked it, man), Wednesday, and Bridgerton.

Netflix, though, hasn’t been satisfied with YouTube’s UGC owning more living room TV watch time than its content, hence its push into the creator space. It’s put resources into copycatting YouTube with creators’ back catalogs, while also hamstringing its own originals by boxing them into production guidelines that assume viewers aren’t going to pay attention to anything it makes.

Sarandos asserted that Netflix wants to be a “must-have” service, Reuters reports, and that firing Bajaria was a step toward that goal.

“I know ​that we could do better,” he said in a post-earnings call. “Now we’ve seen an opportunity to take our slate to the next ​level.”

All this being said about originals, Netflix said during its earnings call that it plans to increase its offerings by licensing third-party content. Considering it expected to own Warner Bros. Discovery’s entire business by now, we’re not surprised it’s trying to make up the gap. HBO sure would have fit nicely into its plans for premium TV…

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