Audio streaming platform Spotify has announced that it is laying off 6% of its workforce, days after several major tech companies also announced layoffs.
On Monday morning, Spotify CEO Daniel Ek shared a note with employees about the company’s organizational changes. It was later published on Spotify’s website.
“As we say in our Band Manifesto, change is the only constant. For this reason, I continue to reiterate that speed is the most defensible strategy a business can have,” Ek began.
“But speed alone is not enough. We must also operate with efficiency. It’s these two things together that will fuel our long-term success. With this in mind, I have some important news to share today.”
The news? Some reshuffling in the executive department and a bunch of layoffs.
Spotify will centralize most of its engineering and product work under Chief Product Officer Gustav Söderström and business areas under its Chief Business Officer Alex Norstrom. Both will lead teams as company co-presidents.
Throughout Monday, the company will hold “one-on-one conversations” with certain employees to let them know if they’ve been let go as part of the restructuring.
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Spotify’s Chief Content Officer Dawn Ostroff has decided to leave the company due to these changes. Ostroff was responsible for Spotify’s accelerated growth in the podcast department.
“In hindsight, I was too ambitious in investing ahead of our revenue growth,” Ek admitted. “And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today.”
According to a US Securities and Exchange Commission filing on Monday, the streaming platform will spend between €35-45 million ($51 million to CAD 65.5 million) on the severance packages.
Laid-off employees will receive the following:
- Severance pay for approximately five months, calculated on local notice period requirements and employee tenure
- Payouts for all accrued and unused vacation time
- Extended healthcare for the same period as the severance pay
- Immigration support for employees whose immigration status is connected with their employment
- Outplacement services and career support for the next two months
Ek ended the memo by saying 2023 would mark a “new chapter,” and the difficult decisions will help Spotify be better positioned for the future.
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