Music Streaming Giant Spotify On Monday Announced Layoffs
Spotify, a leading provider of music streaming, said on Monday that it will lay off 6% of its personnel. The choice is the result of recent corporate layoffs.What Spotify said in a statement today is as follows:Change is the only constant, as we state in our band's motto. This is why I keep saying that a company's best course of action is to move quickly. But mere speed is insufficient. We must also work effectively. These two factors working in tandem will be the source of our long-term success. I want to share some significant news with you today in light of this.While we have made enormous strides in the previous several years to increase speed, we haven't given as much attention to increasing efficiency. We still lag behind because we spend too much effort synchronising minute differences in our approaches. Efficiency also has more significance in a difficult economic climate. So, I have made the choice to restructure our company in an effort to increase efficiency, manage expenses, and hasten decision-making.We are starting by radically altering how we conduct ourselves at the top. To do this, I will place the bulk of our engineering and product activities under Gustav's leadership as Chief Product Officer and the business divisions under
Alex's leadership as Chief Business Officer. I'm glad to report that Spotify veterans Gustav and Alexfor a very long time and have done excellent job, will be in charge of these teams as co-presidents, assisting me in managing the business on a daily basis. They'll explain more about what this means to you in the upcoming days, but I have no doubt that under their leadership, Spotify will see enormous success.I can't wait to tell you more about all the things we have in store since these changes will enable me to return to the area of my job where I excel—working more on Spotify's future.Dawn Ostroff has chosen to leave Spotify as a result of this adjustment. Dawn has had a significant impact on both Spotify and the music industry as a whole. She worked hard, and Spotify expanded.our podcast content by 40 times, significantly accelerated the development of the format, and emerged as the market's top music and podcast provider. These audio investments generated increased interest in the possibilities of Spotify's audio advertising as well as new prospects for musicians and podcasters. Her efforts allowed Spotify to improve the ad format itself and more than quadruple our advertising business's income to €1.5 billion. We sincerely appreciate her crucial contribution and wish her the best of luck. Dawn will soon take on the position of senior advisor to aid with this transition. In the future, Alex will be in charge of the content, licencing, and advertising tasks; stay tuned for more information.on that from him.
I've now reached the second update. We have decided to cut the number of personnel as part of this initiative and to more closely align our costs.All impacted workers will have one-on-one discussions over the course of the following several hours. And while though I think this choice is the best one for Spotify, I recognise that many of you will see it as a change in our culture given our historical emphasis on expansion. However, as our company develops and expands, so too must our method of operation while adhering to our key principles.In order to provide some context for why we are making this choice, in 2022, the Like many other corporate executives, I wanted to maintain the positive effects of the epidemic and thought that we would be protected by our large, international clientele and decreased vulnerability to the effects of a slowdown in advertising. In retrospect, I should not have invested before our revenue growth picked up. And as a result, we are presently cutting around 6% of our workforce across the board. I accept full responsibility for the decisions that led to where we are now.
My main concern right now is making sure that every worker is treated decently when they leave. The following will be applicable to all impacted employees, and Katarina will go into more detail on all the nuances around the ways we are dedicated to helping these outstanding bandmates:
Severance compensation: As a baseline for all employees, the typical employee will get around five months' worth of severance pay. Based on the required local notice time and the length of employment, this will be determined.
PTO: Any leaving employee will get payment for any accumulated and unused vacation days.
Healthcare: Throughout the employee's notice period, we will continue to provide healthcare coverage.
Immigration support: HRBPs are collaborating with our mobility team to assist any affected workers whose immigration status is related to their job.
Next Steps:
In practically all ways, we succeeded in achieving our goals from 2022, and our company as a whole is still doing well. But a new era begins in 2023. I think we will be in a stronger position going forward because of these difficult choices. Nothing has changed in our dedication to achieve our lofty objectives.Although we've made great progress toward creating a complete platform for artists of all skill levels, there is still more work to be done. We must continue to develop our tools and technology and look for innovative approaches to assist artists in connecting with their audiences, developing their careers, and making money from their work if we are to truly become the go-to destination for creators.
