The feel-good of “Spotify Wrapped” was left in 2022. Spotify announced today, January 23, that it is “reducing our employee base by about 6% across the company” through an open letter from CEO Daniel Ek posted here. It’s brutal, but at least Spotify didn’t compound the salt in the layoff wound by hosting a private Sting performance like Microsoft reportedly did.
The lengthy note from Ek additionally announced that Chief Content & Advertising Business Officer Dawn Ostroff “has decided to depart Spotify,” while Chief Product Officer Gustav Söderström and Chief Freemium Business Officer Alex Norström will be leading their respective teams “as co-presidents, effectively helping me run the company day-to-day.”
“In the near term, Dawn will assume the role of senior advisor to help facilitate this transition,” Ek wrote. “Alex will take on the responsibility for the content, advertising and licensing work going forward and you’ll hear more from him on that.”
Ek explained that the approximately six percent cut in workforce is due to him being “too ambitious in investing ahead of our revenue growth” and because he had “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.”
Beyond Spotify and Microsoft, big companies like Amazon, Google parent company Alphabet, and Salesforce have also recently announced layoffs.
See some of the reactions to the news below.
Spotify CEO Daniel Ek, in a memo to employees:
"Today, we are reducing our employee base by about 6% across the company."https://t.co/3R2l0P0Zbu
— David Gura (@davidgura) January 23, 2023
Spotify to cut its workforce in an effort to save costs? What costs? It creates literally nothing. I'm sure whatever short fall they're making could easily be plugged by Daniel Ek throwing some pocket change at it rather than laying off workers. But oh yes, I forgot…yacht money
— James Kennedy (@JamesKennedyUK) January 23, 2023
$SPOT Spotify will cut 6% of its staff.
€35-45M charge expected.
CEO Daniel Ek:
“In 2022, the growth of Spotify’s OPEX outpaced our revenue growth by 2X”
Here is a look at the most recent quarter. ⬇️https://t.co/1qGP7cjZNr
— App Economy Insights (@EconomyApp) January 23, 2023
Spotify CEO Daniel Ek: basically, I hired too many people. pic.twitter.com/4me2y4Bb23
— Brian Sozzi (@BrianSozzi) January 23, 2023
Spotify cuts 6% of its workforce, impacting 600 people:
“I believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us […] In hindsight, I was too ambitious,” said Spotify co-founder and CEO Daniel Ek. (Bloomberg) pic.twitter.com/C9teGdeWCG
— Pop Faction (@PopFactions) January 23, 2023
Daniel Ek, Spotify's CEO, has a net worth of $2.4 billion. https://t.co/NagPCt9Wsh
— Christianna Silva (@christianna_j) January 23, 2023