1 year ago
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Spotify announced Monday it's cutting 6% of its planetary workforce arsenic the euphony streaming institution contends with a gloomy economical situation that has seen consumers and advertisers alike bounds their spending.
Spotify has a full workforce of astir 9,800 people, which means the cuts interaction astir 600 employees. According to its LinkedIn profile, the institution employs 5,400 radical successful the U.S. and 1,900 successful Sweden.
Spotify, which is based successful Sweden but listed connected the New York Stock Exchange, sent an interior memo retired to unit Monday announcing the layoffs.
One-on-one conversations with impacted employees volition statesman implicit the adjacent respective hours, Daniel Ek, Spotify's CEO, wrote successful the note, which was posted publically connected the company's website.
"Like galore different leaders, I hoped to prolong the beardown tailwinds from the pandemic and believed that our wide planetary concern and little hazard to the interaction of a slowdown successful ads would insulate us," Ek said.
"In hindsight, I was excessively ambitious successful investing up of our gross growth. And for this reason, today, we are reducing our worker basal by astir 6% crossed the company."
Ek said successful the enactment to employees that helium takes "full accountability for the moves that got america present today."
Laid-off employees volition person an mean of 5 months of severance and continued wellness attraction sum and migration enactment for workers whose migration presumption is connected with their employment, Ek said.
Dawn Ostroff, Spotify's caput of content, is besides leaving the firm. Ostroff, a erstwhile president of Conde Nast Entertainment, joined Spotify successful 2018 to assistance the institution turn its fledgling advertizing and podcasting businesses.
In her clip astatine Spotify, Ostroff signed Barack and Michelle Obama's accumulation institution Higher Ground Productions to person the erstwhile U.S. president and archetypal woman enactment connected exclusive podcasts for Spotify. She besides led the woody to get exclusive rights to The Joe Rogan amusement and was liable for negotiating exclusive podcasting deals with Kim Kardashian, Prince Harry and Meghan Markle.
"Because of her efforts, Spotify grew our podcast contented by 40x, drove important innovation successful the mean and became the starring euphony and podcast work successful galore markets," Ek said successful the memo Monday.
Last week, Google became the latest large tech sanction to denote layoffs, announcing plans to chopped 12,000 employees. Microsoft and Amazon, meanwhile, person besides announced layoffs.
Tech firms faced a reckoning successful 2022 arsenic involvement complaint hikes from the U.S. Federal Reserve made shares a little charismatic stake for investors.
Here's the afloat memo Ek sent to Spotify staff:
Team,
As we accidental successful our Band Manifesto, alteration is the lone constant. For this reason, I proceed to reiterate that velocity is the astir defensible strategy a concern tin have. But velocity unsocial is not enough. We indispensable besides run with efficiency. It's these 2 things unneurotic that volition substance our semipermanent success. With this successful mind, I person immoderate important quality to stock today.
While we person made large advancement successful improving velocity successful the past fewer years, we haven't focused arsenic overmuch connected improving efficiency. We inactive walk acold excessively overmuch clip syncing connected somewhat antithetic strategies, which slows america down. And successful a challenging economical environment, ratio takes connected greater importance. So, successful an effort to thrust much efficiency, power costs, and velocity up decision-making, I person decided to restructure our organization.
To start, we are fundamentally changing however we run astatine the top. To bash this, I volition beryllium centralizing the bulk of our engineering and merchandise enactment nether Gustav arsenic Chief Product Officer and the concern areas nether Alex arsenic Chief Business Officer. I'm blessed to accidental that Gustav and Alex, who person been with Spotify for a agelong clip and person done large work, volition beryllium starring these teams arsenic co-presidents, efficaciously helping maine tally the institution day-to-day. They'll archer you much astir what this means successful the coming days, but I'm assured that with their leadership, we'll beryllium capable to execute large things for Spotify.
Personally, these changes volition let maine to get backmost to the portion wherever I bash my champion work—spending much clip moving connected the aboriginal of Spotify—and I can't hold to stock much astir each the things we person coming.
As a portion of this change, Dawn Ostroff has decided to depart Spotify. Dawn has made a tremendous people not lone connected Spotify, but connected the audio manufacture overall. Because of her efforts, Spotify grew our podcast contented by 40x, drove important innovation successful the mean and became the starring euphony and podcast work successful galore markets. These investments successful audio offered caller opportunities for euphony and podcast creators and besides drove caller involvement successful the imaginable of Spotify's audio advertising. Thanks to her work, Spotify was capable to innovate connected the ads format itself and much than treble the gross of our advertizing concern to €1.5 billion. We are enormously grateful for the pivotal relation she has played and privation her overmuch success. In the adjacent term, Dawn volition presume the relation of elder advisor to assistance facilitate this transition. Alex volition instrumentality connected the work for the content, advertizing and licensing enactment going guardant and you'll perceive much from him connected that.
The request to go much efficient
That brings maine to the 2nd update. As portion of this effort, and to bring our costs much successful line, we've made the hard but indispensable determination to trim our fig of employees.
Over the adjacent respective hours, one-on-one conversations volition instrumentality spot with each impacted employees. And portion I judge this determination is close for Spotify, I recognize that with our historical absorption connected growth, galore of you volition presumption this arsenic a displacement successful our culture. But arsenic we germinate and turn arsenic a business, truthful indispensable our mode of moving portion inactive staying existent to our halfway values.
To connection immoderate position connected wherefore we are making this decision, successful 2022, the maturation of Spotify's OPEX outpaced our gross maturation by 2X. That would person been unsustainable semipermanent successful immoderate climate, but with a challenging macro environment, it would beryllium adjacent much hard to adjacent the gap. As you are good aware, implicit the past fewer months we've made a sizeable effort to rein-in costs, but it simply hasn't been enough. So portion it is wide this way is the close 1 for Spotify, it doesn't marque it immoderate easier—especially arsenic we deliberation astir the galore contributions these colleagues person made.
Like galore different leaders, I hoped to prolong the beardown tailwinds from the pandemic and believed that our wide planetary concern and little hazard to the interaction of a slowdown successful ads would insulate us. In hindsight, I was excessively ambitious successful investing up of our gross growth. And for this reason, today, we are reducing our worker basal by astir 6% crossed the company. I instrumentality afloat accountability for the moves that got america present today.
My absorption present is connected ensuring that each worker is treated reasonably arsenic they depart. While Katarina volition supply much item connected each of the specifics astir the ways we are committed to supporting these talented bandmates, the pursuing volition use to each impacted employees:
- Severance pay: We volition commencement with a baseline for each employees with the mean worker receiving astir 5 months of severance. This volition beryllium calculated based connected section announcement play requirements and worker tenure.
- PTO: All accrued and unused abrogation volition beryllium paid retired to immoderate departing employee.
- Healthcare: We volition proceed to screen healthcare for employees during their severance period.
- Immigration support: For employees whose migration presumption is connected with their employment, HRBPs are moving with each impacted idiosyncratic successful performance with our mobility team.
- Career Support: All employees volition beryllium eligible for outplacement services for 2 months.
What's Next
In astir each respects, we accomplished what we acceptable retired to bash successful 2022 and our wide concern continues to execute nicely. But 2023 marks a caller chapter. It's my content that due to the fact that of these pugnacious decisions, we volition beryllium amended positioned for the future. We person ambitious goals and thing has changed successful our committedness to achieving them.
We've travel a agelong mode successful our efforts to physique a broad level for creators of each levels, but there's inactive overmuch to beryllium done. To genuinely go the go-to destination for creators, we request to support improving our tools and technology, research caller ways to assistance creators prosecute with their audiences, turn their careers, and monetize their work.
In fact, looking astatine our roadmap, with the changes we are making and what we person planned to stock astatine our upcoming Stream On event, I'm assured that 2023 volition beryllium a twelvemonth wherever consumers and creators volition spot a dependable watercourse of innovations dissimilar thing we person introduced successful the past respective years. I volition stock much astir these breathtaking developments successful the coming weeks.
Finally, I anticipation you volition articulation maine time for Unplugged.
And again, for those of you who are leaving, I convey you for everything you've done for Spotify and privation you each aboriginal success.
– Daniel
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- CNBC's Ashley Capoot contributed to this report
English (US) ·