Amid mass layoffs, Spotify CFO announces exit

Music streaming giant Spotify announced this week that it would reduce the number of its employees by around 17 per cent in a bid to cut costs amid "dramatically" slower economic growth. Around 1,500 people will leave the company, the company stated.

Amid this, Spotify's Chief Financial Officer has also announced his exit. Paul Vogel joined the company in 2016 as the head of investor relations and was promoted to the CFO position in 2020. Announcing his departure, the music streaming giant said that he will be leaving the company on March 31, 2024.

"Spotify has embarked on an evolution over the last two years to bring our spending more in line with market expectations while also funding the significant growth opportunities we continue to identify. I've talked a lot with Paul about the need to balance these two objectives carefully.

Over time, we've come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences," Daniel Ek, the Chief Executive Officer of Spotify said in a press release.

He added, "As a result, we've decided to part ways, but I am very appreciative of the steady hand Paul has provided in supporting the expansion of our business through a global pandemic and unprecedented economic uncertainty."

In order to facilitate "the company's realignment of its financial leadership team," Spotify's vice-president of financial planning and analysis, Ben Kung, will be taking on more duties.

Meanwhile, the company was the latest in a series of layoffs announced in the tech industry cutting tens of thousands of jobs following a boom during Covid pandemic lockdowns.

"I realise that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance," CEO Daniel Ek wrote in a letter to employees, which was seen by AFP.

He said that in 2020 and 2021, the Swedish company "took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing and new verticals."

"However, we now find ourselves in a very different environment," noting that "economic growth has slowed dramatically and capital has become more expensive." "Despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big," he added.

/KN/