Spotify Announces Restructuring Amid Economic Challenges
According to the CEO, while the company has made progress in improving speed, they have not focused enough on efficiency.
- Staff Reporter
Spotify, the leading music and podcast streaming service, is undergoing a major restructuring in order to improve efficiency, control costs, and speed up decision-making. The CEO of the company has announced that certain areas of the business will be centralized under new leadership, and the number of employees will be reduced.
According to the CEO, while the company has made progress in improving speed, they have not focused enough on efficiency. In today's challenging economic environment, efficiency is more important than ever. The CEO also acknowledged that there have been issues with costs outpacing revenue growth, and this restructuring is necessary to address that.
As part of the restructuring, Dawn Ostroff, an executive at Spotify, will be departing the company. The CEO expressed gratitude for Ostroff's contributions to the company, citing her efforts in growing Spotify's podcast content by 40x, driving significant innovation in the medium, and becoming the leading music and podcast service in many markets.
The CEO also announced that Gustav, who has been with Spotify for a long time, will be appointed as Chief Product Officer and Alex as Chief Business Officer and both will be leading these teams as co-presidents, effectively helping the CEO run the company day-to-day.
These changes will allow the CEO to focus on working on the future of Spotify and the company is confident that with the new leadership and restructuring, they will be able to achieve great things. The one-on-one conversations with the impacted employees will take place over the next several hours, and while the CEO believes this decision is right for Spotify, they understand that it may be viewed as a shift in the company's culture.
Spotify has reported that it added 7 million net Premium subscribers in Q3 2022, bringing its total global paying subscriber base to 195 million. The company also generated $3.06 billion in quarterly revenues in Q3, a 12% increase from the previous year.
Despite the recent trend of layoffs in the technology sector and music industry, Spotify has not announced any job cuts. In contrast, rival music streaming platform SoundCloud began reducing its global workforce by 20% in August. Other tech giants, such as Google, Microsoft, Facebook and Amazon, have also announced layoffs this year. According to tracking site Layoffs.fyi, a total of 55,970 tech workers have lost their jobs across 173 tech firms so far this year.
