A group of Netflix employees staged a 'virtual' walkout and public rally in Los Angeles on Wednesday as anger swelled over a new Dave Chappelle comedy special that activists say is harmful to the transgender community.

The streaming giant has found itself embroiled in an intense and highly public controversy over Chappelle's The Closer, in which the stand-up star insists "gender is a fact" and accuses LGBTQ people of being "too sensitive".

Participating employees stopped their Netflix-related work during the 'virtual' walkout and instead spent the time on content supporting the trans community and making donations to charity. More than 100 Netflix employees and their supporters attended the rally.

"We respect the decision of any employee who chooses to walk out, and recognize we have much more work to do both within Netflix and in our content," Netflix said in an earlier statement to AFP, which said the company "understands the deep hurt that's been caused".

Organisers presented a list of "firm asks" for Netflix content chief Ted Sarandos at Wednesday's rally, which leader Ashlee Marie Preston earlier said had been moved to a larger site due to "overwhelming demand".

Protesters want content that prioritises "the safety and dignity of all marginalised communities," she wrote on Instagram.

Transgender Netflix employee Terra Field has called on the streamer to add a content warning to The Closer, and to promote more "queer and trans comedians and talent".

"A place can't be a great place to work if someone has to betray their community to do so," Field wrote in a blog post on Monday.

The Closer has been condemned by LGBTQ groups, which cited studies linking stereotypes about minorities to real-world harm.

Dave Chappelle

Sarandos wrote to staff in a leaked internal memo last week that "content on screen doesn't directly translate to real-world harm", and emphasised the importance of defending "artistic freedom".

But the co-CEO gave interviews to multiple Hollywood trade publications late on Tuesday in which he admitted: "I screwed up."

"I should have first and foremost acknowledged in those emails that a group of our employees were in pain, and they were really feeling hurt from a business decision that we made," he told The Hollywood Reporter.

While agreeing that "content on screen can have impact in the real world, positive and negative", Sarandos reiterated his belief that the Chappelle stand-up should not be taken down or have any disclaimer added.

"This group of employees felt a little betrayed because we've created such a great place to work that they forgot that sometimes these challenges will come up," said Sarandos.

Three employees including Field were reportedly suspended last week after crashing a virtual meeting for executives on the Chappelle special, but later reinstated. Another was sacked for allegedly leaking internal data about the cost of the programme.

Source: AFP