Spotify cuts 6% of staff, key executive to depart as part of broader restructure
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Spotify (NYSE:SPOT) announced on Monday that it was reducing roughly 6% of its workforce and a key executive would leave the company as part of a broader restructuring.
In a memo to employees, CEO Daniel Ek said Chief Content & Advertising Business Officer Dawn Ostroff would transition to a senior advisor to the company and then leave the company.
Ek added that Spotify's (SPOT) Chief Freemium Business Officer Alex Norström and Chief Research & Development Officer Gustav Söderström would be promoted to co-presidents and take on additional responsibilities.
"Personally, these changes will allow me to get back to the part where I do my best work—spending more time working on the future of Spotify—and I can’t wait to share more about all the things we have coming," Ek wrote in the memo.
As part of the layoffs, Spotify (SPOT) said it would incur between €35M and €45M in severance-related charges.
Employees who are affected will receive approximately five months of severance, accrued and used paid time off will be paid, healthcare will be covered, immigration support will continue to be provided and outplacement support will be provided for two months.
Spotify (SPOT) shares were up nearly 4% to $101.75 in premarket trading on Monday.
The layoffs from Spotify (SPOT) are just the latest from big tech companies. Late last year, Meta Platforms (META) announced it would cut 11,000 employees, while Amazon (AMZN) said earlier this month it would lay off 18,000 off employees.
Last week, Microsoft (MSFT) and Alphabet (GOOG) (GOOGL) made announcements that they would reduce headcount by 10,000 and 12,000, respectively.
Earlier this month, investment firm Jefferies made several ratings changes on the interactive media sector, downgrading Spotify (SPOT) among several other changes.