February 5, 2023

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Spotify to lay off 6% of employees, Don Ostroff to depart

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Spotify is undertaking a sweeping restructuring amid economic uncertainty, announcing it is cutting 6% of its headcount to cut costs.

Also, CEO Daniel announced a senior management shakeup. Don Ostroff, chief content and advertising business officer, is leaving Spotify. Two top executives — Gustav Söderström and Alex Norström — have been promoted to vice presidents, reporting to Ek.

The layoffs will eliminate about 600 jobs; Spotify recently reported having 9,800 full-time employees worldwide as of September 30. The company estimates that it will incur approximately €35 million-€45 million in severance-related charges.

Ek, in a memo to staff, wrote, “While we have made great strides in improving speed over the past few years, we have not focused as much on improving efficiency. We still spend a lot of time syncing on slightly different techniques, which slows us down. And in a challenging economic environment, efficiency becomes more important. Therefore, in an effort to increase efficiency, control costs and speed up decision-making, I have decided to restructure our organization.”

One said,[W]While I believe this decision is the right one for Spotify, I understand that with our historical focus on growth, many of you will see this as a change in our culture. But as we evolve and grow as a business, so must the way we operate while staying true to our core values.”

On the senior management front, Spotify is centralizing most of the engineering and product work under chief product officer Gustav Söderström and business areas under chief freemium business officer Alex Norström — each of whom has been named vice president, “effectively helping me run the day-to-day of the company — Today is the day,” said one.

Spotify will report financial results for the fourth quarter of 2022 on Tuesday, January 31, before the market opens.

More coming

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