Spotify’s chief financial officer will leave the music-streaming giant in the coming months, the company said — just three days after it revealed plans to lay off 17% of its workforce in the third round of job cuts this year.
Paul Vogel — who joined Spotify in 2016 as the head of investor relations and was tapped for the CFO position in 2020 — “will be leaving the company on March 31, 2024,” Spotify said in a press release.
In a statement, CEO Daniel Ek said Spotify has initiated the search for a new CFO. In the meantime, Ben Kung, vice president of financial planning and analysis, will take on Vogel’s previous responsibilities.
“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,” Ek said in a statement.
“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,” he added.
“As a result, we’ve decided to part ways.”
Representatives for Spotify did not immediately respond to The Post’s request for comment.
Vogel’s imminent departure caps a dreadful week at the streaming giant, which announced in a blog post on Monday that it would be handing 17% of its roughly 9,000 staffers pink slips.
Ek said in a companywide email that Spotify was taking “substantial action to rightsize our costs” following its mass hiring coming out of the COVID years, when the benchmark federal funds rate hovered around 3%.
By 2022, the Federal Reserve implemented an aggressive tightening regime that’s sent interest rates to its current 22-year high, between 5.25% and 5.5% — a blow to financials for consumers and companies, including Spotify.
Spotify’s latest job cuts are set to impact some 1,500 jobs, and terminated employees will receive “approximately five months of severance,” accrued and unused paid time off and health insurance during the severance period, according to Ek.
“Being lean is not just an option but a necessity,” Spotify’s 40-year-old billionaire boss added in the 1,000-word note shared earlier this week.
The Stockholm, Sweden-based company has become leaner throughout 2023, starting the year with a 6% workforce reduction that bid adieu to 600 staffers, including he company’s chief content and advertising business officer, Dawn Ostroff.
At the time, Ek sent a similar email to staffers notifying them that the company was spending too much money and was struggling to rein in costs despite “a considerable effort” to do so.
Spotify then laid off 2% of staff, equivalent to about 200 roles, in June following Prince Harry and Meghan Markle’s highly-publicized podcasting flop.
The streaming giant reportedly paid the Duchess of Sussex over $18 million for her “Archetypes” podcast launched last summer, though its struggle to nab a top spot on the Spotify charts pushed the company to let a significant number of staffers go due to the error in judgment.
Markle’s multimillion-dollar payday was part of a larger, $1 billion bet on podcasting that has seen top podcasters Joe Rogan, Alex Cooper and Emma Chamberlain bringing in significant windfalls as Spotify has had to lay off staffers behind the scenes in an effort to accommodate its investment.
However, Rogan’s rumored to take his wildly-popular “Joe Rogan Experience” podcast — which draws an estimated 11 million listeners per episode — to a rival platform when his exclusive licensing deal with Spotify expires next year.
Spotify reportedly paid Rogan $200 million in 2020 as part of their agreement, but could be forced to dish out more to keep the lucrative podcast host.
Rogan has a variety of options, including striking out on his own by creating a media company that would distribute the podcast as well as produce other content that would appeal to his fan base, said analysts, who believe Rogan is in the driver’s seat.
Another option may be joining forces with Rogan’s good friend Elon Musk, the Tesla mogul who famously smoked pot on Rogan’s podcast and got in trouble for it.
Meanwhile, Spotify has been struggling to turn a profit. In an apparent move to do so, it implemented a $1 price increase across its US plans in July. Its premium single tier now starts at $10.99, duo at $14.99, family at $16.99 and the student plan at $5.99.
It has also been expanding into audio books, and is expected to include access to book recordings in its rumored $20-a-month “Supremium” tier.
According to renowned blogger Chris Messina, Spotify is expected to rollout its priciest monthly subscription option in the coming months, giving listeners access to a “sound capsule” personalized to each user, as well as “24-bit lossless audio” — also known as “high fidelity” or “HiFi.”
Users who subscribe to the Supremium tier will also reportedly have the option of listening to 30 hours of audio books per month as well as the ability to sort one’s library by mood, activity, and genre.
The more-expensive subscription option is an evident move to right Spotify’s profits after it reported a $503 million loss in the first nine months of this year.
Last year, during Spotify’s first investor day since going public, Ek announced ambitious growth targets, including that he wants the company to be profitable by 2024, and that he wants to generate $100 billion in revenue by 2030.
Spotify, which is listed on the New York Stock Exchange, was up over 1%, at $195,82, in premarket trading hours on Friday.
NEWS CREDIT
