Spotify to Lay Off 6% of Staff, Shuffle Executives

By Will Feuer

Spotify Technology SA said it is laying off about 6% of its staff and shuffling a few executives in a bid to streamline operations and rein in costs, becoming the latest tech company to unwind some of its pandemic-fueled growth spurt.

Demand for the music-streaming company's services surged during the Covid-19 pandemic, but Chief Executive Daniel Ek said Monday that his growth plans were too ambitious. His comments echo that of other tech executives who have acknowledged in recent months that they were caught by surprise as a pandemic-fueled surge in demand faded.

"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," Mr. Ek said. "I take full accountability for the moves that got us here today."

Last year, growth of Spotify's operating costs outpaced the company's revenue growth by a factor of more than two, Mr. Ek said.

"Over the last few months we've made a considerable effort to rein-in costs, but it simply hasn't been enough," he said in a note to employees that was shared on the company's website.

In addition to the layoffs, Mr. Ek said Dawn Ostroff, chief content and advertising business officer, has decided to leave the company.

Alex Norstrom, currently chief freemium business officer, and Gustav Soderstrom, currently chief research and development officer, would each take on additional responsibilities and be appointed as co-presidents of the company. Mr. Ek said the company is "fundamentally changing how we operate at the top."

Mr. Ek said he would spend more time working on projects for the future of Spotify.

Shares rose more than 4%, to $102.15.

Write to Will Feuer at Will.Feuer@wsj.com

(END) Dow Jones Newswires

January 23, 2023 07:47 ET (12:47 GMT)

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