Spotify is undertaking a broad restructuring amid economic uncertainty, announcing that it is cutting 6% of its headcount to reduce costs.
In addition, CEO Daniel Ek announced a senior management shakeup. Dawn Ostroff, chief content and advertising business officer, is departing Spotify. Two top execs — Gustav Söderström and Alex Norström — have been elevated to the position of co-president, reporting to Ek.
The layoffs will eliminate nearly 600 jobs; Spotify most recently reported having 9,800 full-time employees worldwide as of Sept. 30. The company estimates that it will incur approximately €35 million-45 million in severance-related charges.
Ek, in the memo to employees, wrote, “While we have made great progress in improving speed in the last few years, we haven’t focused as much on improving efficiency. We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization.”
Ek continued, “[W]hile I believe this decision is right for Spotify, I understand that with our historic focus on growth, many of you will view this as a shift in our culture. But as we evolve and grow as a business, so must our way of working while still staying true to our core values.”
On the senior management front, Spotify is centralizing most engineering and product work under chief product officer Gustav Söderström and the business areas under chief freemium business officer Alex Norström — each of whom have been named co-presidents, “effectively helping me run the company day-to-day,” Ek said.
Spotify is scheduled to report fourth-quarter 2022 financial results on Tuesday, Jan. 31, before the market opens.
More to come
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