Spotify chief financial officer Paul Vogel is leaving his post on Mar. 31, 2024, the company announced yesterday (Dec. 7), saying he is no longer the right fit.
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Vogel joined the Swedish streaming service in 2016 as head of investor relations and has been in his current role since 2020. But as the company spent the last two years trying to rein in spending while also funding growth opportunities, “I’ve talked a lot with Paul about the need to balance these two objectives carefully,” Spotify CEO Daniel Ek said. “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.”
A successor for Vogel has not yet been named. Ben Kung, vice president of financial planning and analysis, will take on “additional responsibilities” while the company mounts an external search for Vogel’s permanent replacement.
The decision comes a mere three days after the company announced its third and biggest layoff of 2023 in a bid to become “relentlessly resourceful,” according to Ek. Because most of its streaming earnings end up in the hands of major record labels, Spotify has been struggling to find a consistent path to profitability.
Quotable: Spotify’s expenses and funding “exploded”
“Spotify’s superpower was combining engineering breakthroughs with organisational abilities—it organised creators and copyright owners to build an entirely new economic model that benefited everyone involved. During the boom, it applied these powers to new markets like podcasts, audiobooks and live chat rooms. Its operating expenses and funding for content exploded. It is now sorting out what was built to last and what was built for the bubble.”
—Mason Morfit, partner, CEO, and chief investment officer at ValueAct, to the Financial Times when the activist investor that bought a stake in Spotify in February 2023.
Spotify’s streamlining, by the digits
17%: Share of its global workforce Spotify laid off on Dec. 4
€32 million ($34 million): Spotify’s operating profit for the three months ending Sept. 30—its first profitable quarter in more than a year of loss-making—so the search for a new finance officer comes from a “position of strength,” Ek said
200: Employees fired in June from Spotify’s podcast division—a high-investment area on which the company splurged more than $1 billion. This was after the company already fired 600 people across departments in January.
2: Critically acclaimed podcasts (Heavyweight and Stolen) that Spotify canceled on Dec. 5, as part of its plan to take a step back from original programming. They will run until the end of their current seasons.
Fun fact: Vogel made millions
Less than 24 hours after the latest mass firing, Vogel banked $9.38 million by cashing out 47,859 Spotify shares, according to a Dec. 5 regulatory filing.
Company of interest: Tidal
Jay-Z-backed streamer Tidal yesterday (Dec. 7) announced that it is cutting 10% of its workforce. The downsizing decision is driven by parent company Block’s decision to cap the total workforce at 12,000. Around 40 staffers faced the axe, according to Bloomberg, which broke the news.
Spotify and Tidal aren’t isolated examples. Over the course of 2023, SiriusXM-owned Pandora, SoundCloud, and Amazon Music have all been pruning their workforces for greater efficiency.
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