Music streaming service Spotify announced today that it will be restructuring the company affecting 600 employees.
The music streaming services said the following will apply to all impacted employees:
- Severance pay: We will start with a baseline for all employees with the average employee receiving approximately 5 months of severance. This will be calculated based on local notice period requirements and employee tenure.
- PTO: All accrued and unused vacation will be paid out to any departing employee.
- Healthcare: We will continue to cover healthcare for employees during their severance period.
- Immigration support: For employees whose immigration status is connected with their employment, HRBPs are working with each impacted individual in concert with our mobility team.
- Career Support: All employees will be eligible for outplacement services for 2 months.
“To offer some perspective on why we are making this decision, in 2022, the growth of Spotify’s OPEX outpaced our revenue growth by 2X. That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap,” said Spotify CEO Daniel Elk.
“As you are well aware, over the last few months we’ve made a considerable effort to rein-in costs, but it simply hasn’t been enough. So while it is clear this path is the right one for Spotify, it doesn’t make it any easier—especially as we think about the many contributions these colleagues have made.
“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. And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today.”
Spotify said the retrenchment were part of its effort to drive more efficiency, control costs, and speed up decision-making.
