Spotify’s chief financial officer, Paul Vogel, is scheduled to depart from his position at the end of March at the direction of Spotify CEO Daniel Ek, who no longer deems him suitable for the role. Vogel has been a part of the company since 2016 and has served as the CFO since 2020. This decision for Vogel to step down follows Spotify’s recent announcement of its largest layoff in 2023, in which 17% of its global workforce was let go.
Spotify, renowned for its global streaming service, has been focused on managing expenses while concurrently investing in growth opportunities. This balancing act has proven to be a difficult endeavor as the company has encountered challenges in consistently generating profit, largely due to a significant portion of its revenue being directed towards record labels. Consequently, the company is now seeking a new CFO with a diverse set of experiences to guide them through this new phase.
Subsequently, the company has yet to appoint a successor for Vogel. In the interim, Ben Kung, Spotify’s vice president of financial planning and analysis, will assume expanded responsibilities. Despite the recent layoffs and the departure of the CFO, Spotify reported its first profitable quarter in over a year, with an operating profit of €32 million ($34 million) in the three months ending Sept. 30.
Concurrently, Spotify is also planning to scale back its original programming, with the cancellation of two popular podcasts, “Heavyweight” and “Stolen.” Previously, the company heavily invested in its podcast division, spending over $1 billion before laying off 200 employees in that area in June and an additional 600 across departments in January.
On the financial front, Paul Vogel greatly profited from cashing out Spotify shares just a day after the company’s latest layoffs, adding further complexity to the situation. Meanwhile, the downsizing trend is not exclusive to Spotify, as other music streaming companies like Tidal, owned by Jay-Z, have also announced layoffs to streamline operations.
Tidal disclosed a workforce reduction of 10%, affecting approximately 40 employees, as the parent company aims to cap the total workforce at 12,000. This move mirrors similar efforts by other companies in the music streaming industry, such as Pandora, SoundCloud, and Amazon Music throughout 2023.
With Vogel’s departure and the ongoing changes in the music streaming landscape, it remains to be seen how Spotify will navigate these challenges and continue to innovate in the face of stiff competition from other players in the industry.
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