Spotify Technology SA said on Monday it would cut its global workforce by 6% amid a broader leadership shuffle that includes the departure of Chief Content & Advertising Business Officer Dawn Ostroff, according to a filing with the U.S. Securities and Exchange Commission.
Ostroff, the key executive behind many of Spotify’s big podcast investments, will act as a senior adviser helping to facilitate the reorganization, and Alex Norström, currently chief freemium business officer, and Gustav Söderström, currently chief research & development officer, will take on the roles of co-presidents of Spotify.
In a note to employees posted on Spotify’s website, chief executive Daniel Ek said the job cuts and leadership changes will help bring down costs at a time of economic uncertainty. Spotify’s operating expenses were double the company’s revenue growth in 2022, Ek wrote.
“Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” Ek wrote of the layoffs. “In hindsight, I was too ambitious in investing ahead of our revenue growth.”
Ek added, “I take full accountability for the moves that got us here today.”
Spotify is the latest big tech company to announce a wave of layoffs, following a similar announcement by Google parent company Alphabet, which said last week that it would let go of some 12,000 workers.
Spotify had roughly 9,800 employees, according to recent filings, meaning this round of layoffs will affect close to 600 staffers. Spotify will offer employees 5 months of severance pay and other benefits, which it estimates will result in 35-45 million euros ($38-$49 million USD) of costs, according to the filing and Ek’s memo. Spotify will announce its most recent quarterly earnings on Jan. 31.
“In a challenging economic environment, efficiency takes on greater importance,” Ek wrote about the leadership changes. “In an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization.”
Norström will oversee business areas including the content, advertising and licensing work previously handled by Ostroff, and will hold the title of Spotify’s chief business officer. Söderström will oversee the majority of Spotify’s engineering and product work as Spotify’s chief product officer. Together they are “effectively helping me run the company day-to-day,” Ek wrote.
Ostroff joined Spotify in 2018 to oversee its content partnerships across music, audio and video. She was key in signing exclusive podcast deals with Barack and Michelle Obama’s media company Higher Ground Productions, Kim Kardashian, Joe Rogan, Prince Harry and Meghan Markle.
“Because of her efforts, Spotify grew our podcast content by 40x, drove significant innovation in the medium and became the leading music and podcast service in many markets,” Ek wrote. “Thanks to her work, Spotify was able to innovate on the ads format itself and more than double the revenue of our advertising business to €1.5 billion ($1.63 billion).”
Ostroff previously held executive roles at Condé Nast Entertainment, The CW and UPN Network, where she is credited with having developed the popular reality series America’s Next Top Model.
This article was updated with comments from Daniel Ek.