CEO Daniel Ek has announced that the world’s biggest streaming service, Spotify, will cut around 600 staff, or six per cent of its global workforce.
Ek made the announcement in an all staff memo seen by Prolific North today, which also revealed that perhaps the highest-profile departure will be content and ad business chief Dawn Ostroff, who Ek credits with increasing Spotify’s podcast content by “40x.” Responsibility for content, advertising, and licensing will now fall to chief business officer Alex Norström.
Norström and chief product officer Gustav Söderström will also be stepping up to co-presidents as part of the shake up, allowing Ek to more effectively “run the company day-to-day,” he said.
Spotify is the latest global tech giant to announce significant lay offs recently, following the likes of Google, who announced 12,000 job cuts, also around six per cent of its global workforce; Microsoft with around 5,000 cuts, or five per cent of its staff body, and 18,000 at Amazon – the highest total of the recent lay offs, and the largest in Amazon’s history, although lower as a percentage at under two per cent of the shopping and internet giant’s massive global workforce of around 1.5m.
Spotify opened a sales office in Manchester last year, which it said would be a “significant” part of its European expansion. It also employs a number of staff in largely remote tech roles in Manchester and the wider North. The streamer’s LinkedIn lists 29 members of staff based in Manchester, although so far no indication has been given as to where the cuts may arise. Ek said in the memo that “Over the next several hours, one-on-one conversations will take place with all impacted employees.”
The CEO added: “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. In hindsight, I was too ambitious in investing ahead of our revenue growth. 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.”
In its last quarterly earnings, Spotify reported total revenue of €3 billion, with €2.7 billion coming from premium subscribers and ad-supported revenue coming in at €385 million. It posted an operating loss of €228 million for the quarter.
