Spotify chief Daniel Ek:“In hindsight,I was too ambitious in investing ahead of our revenue growth.”Credit:Bloomberg
The restructuring announced last week will result in Ostroff’s role merged into the role of chief business officer. Ek said the move would ensure “efficiency,cost controls and speed up decision-making”.
Matt Deegan,an independent audio analyst,said Spotify had likely spent “over the odds” on buying up podcasting businesses and signing star celebrities to its app. He said:“It’s no surprise they’re looking at what they spent on big deals and whether they need to do that going forward.”
Shares in Spotify rose 8 per cent in trading in New York. The company said the lay-offs would cost between 35 million euro ($57 million) and 45 million euro.
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The company joinsother tech businesses in making sharp cuts to head count after hiring rapidly during the pandemic. Last week,Google and Microsoft each announced thousands of lay-offs as growth across the tech sector slows.
In a letter to Google’s chief executive,Sundar Pichai,Sir Chris Hohn,the billionaire founder of The Children’s Investment Fund Management (TCI),said the tech company’s lay-offs did not cut deep enough to reduce bloat.
Hohn wrote:“The 12,000 jobs is a step in the right direction,but it does not even reverse the very strong head count growth of 2022.