The media industry continues to experience job loss, with Spotify becoming the latest to reduce its workforce. The company began making reductions today, announcing that six percent of its staff, roughly five hundred people worldwide, would be let go in an attempt to improve profitability.
According to reports, Spotify’s operating expenses have grown twice as fast as the company’s revenue. Those affected will receive paid severance from the company. Most will receive on average about five months of pay, unpaid vacation time, and healthcare while they remain out of work. Employees will also be eligible for outplacement services for two months.
Among the noteworthy items from the layoffs, Spotify’s Chief Content and Advertising Business Officer, Dawn Ostroff has announced she will exit the company. CEO Daniel Ek has also shared a few organizational changes to help drive more efficiency, control costs, and speed up decision-making. Two executives at the company’s Swedish headquarters, Alex Norström, and Gustav Söderström will each absorb additional duties previously held by Ostroff.
“As you are well aware, over the last few months we’ve made a considerable effort to rein-in costs,” Ek told staff in an internal memo. “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.”
Ek mentioned in the note how important Ostroff was to the company, helping it grow its podcast content and audio advertising business. Spotify has reportedly more than doubled its ad revenue to 1.6 billion under Ostroff’s watch.
“Dawn has made a tremendous mark not only on Spotify, but on the audio industry overall,” Ek added. Ostroff joined the company in August 2018 after holding multiple executive roles for 20th Century Fox Television, Michael Jacobs Productions at Disney, Lifetime Entertainment, The CW and UPN networks, and Condé Nast Entertainment.
Eduardo Razo is the Assistant Content Editor for BNM, which includes writing daily news stories on the news media industry. He can be found on Twitter @eddierazo_ or you can reach him by email at eddie1991razo@gmail.com.
