Dawn Ostroff Leaving Spotify as Streaming Audio Giant Slashes Staff by 6 Percent

Audio streaming giant Spotify on Monday said that it would be laying off about 6 percent of its workforce, or about 600 people, as the streaming audio giant becomes the latest company in the technology space to cut back on staff amid a challenging economy.

The company said that it expects to take severance costs of between $38 million and $49 million in connection with the layoffs.

The layoffs, unveiled by CEO Daniel Ek in a blog post, were expected to be more broadly based than a previous round of cuts in October, which hit staff working on canceled shows from in-house podcast studios Gimlet and Parcast.

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To that end, one of Spotify’s most high-profile executives, chief content and advertising officer Dawn Ostroff, will depart the company “as part of a broader reorganization,” the company said. Ostroff will become a senior adviser to Spotify to help with the transition.

As part of other executive changes, Alex Norström, currently chief freemium business officer, and Gustav Söderström, currently chief research and development officer, are being elevated to co-presidents of the company. Norström will oversee content issues.

“As we evolve and grow as a business, so must our way of working while still staying true to our core values,” Ek wrote in his blog post. “To offer some perspective on why we are making this decision, in 2022, the growth of Spotify’s operating expenses outpaced our revenue growth by two times. That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap.”

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He added: “Personally, these changes will allow me to get back to the part where I do my best work—spending more time working on the future of Spotify — and I can’t wait to share more about all the things we have coming.”

The CEO also addressed Ostroff’s exit. “As a part of this change, Dawn Ostroff has decided to depart Spotify,” he wrote. “Dawn has made a tremendous mark not only on Spotify, but on the audio industry overall. Because of her efforts, Spotify grew our podcast content by 40 times, drove significant innovation in the medium and became the leading music and podcast service in many markets.” 

Spotify executives previously signaled they had plans to reduce head-count-related expenses, with CEO Ek telling staff last June that the company would reduce its hiring growth by 25 percent and “be a bit more prudent with the absolute level of new hires over the next few quarters.” Paul Vogel, the company’s chief financial officer, also pointed to “increasing uncertainty regarding the global economy” at Spotify’s investor day in June as a reason for “evaluating [Spotify’s] head-count growth in the near term.”

Spotify is also the latest technology company to unveil big job cuts.

Google parent Alphabet, Amazon, Facebook, Instagram parent Meta Platforms and Microsoft are among the other tech powerhouses that have recently unveiled layoffs. Alphabet said last week that it would lay off 12,000 people. Amazon said earlier this month that it would reduce its staff by 18,000, while Microsoft earlier this week said it would lay off 10,000 people. Meta announced plans to cut 11,000 employees last year, with the likes of Snap, Twitter and Netflix also making significant reductions in 2022.

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As of the end of the third quarter, Spotify employed around 9,800 people. The audio company brought in 3.04 billion euro in revenue and added 195 million paid subscribers during the third quarter. At the time, Ek said the economic downturn had not had a “material impact” on the company’s business but that Spotify would be “more selective” with its “overall spending.”

Spotify will report its fourth-quarter earnings Jan. 31 before the market opens.

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