Updated Jan 2023 Regulatory Changes – Spotify

Earlier today, CEO Daniel Share the following note about the company’s organizational changes with all Spotify employees.


As we say in the band’s manifesto, change is the only constant. For this reason, I keep repeating that speed is the most defensive strategy a company can have. But speed alone is not enough. We must also act efficiently. Together, these two things will fuel our long-term success. With that in mind, I have some important news to share today.

While we’ve made great progress in improving speed in the past few years, we haven’t focused much on improving efficiency. We still spend a lot of time syncing up with slightly different strategies, which slows us down. And in a tough economic environment, efficiency takes on even more importance. Therefore, in an effort to drive more efficiency, control costs and speed up the decision-making process, I decided to restructure our organization.

To start, we’re radically changing how we work at the top. To do this, I will focus most of our engineering and product business Gustav In his capacity as Director of Product and Work Areas under Alex as Chief Business Officer. I am pleased to say that Gustav and Alex, who have been with Spotify for a long time and have done a great job, will lead these teams as Co-Chairs, effectively helping me run the company day-to-day. They’ll tell you more about what this means in the coming days, but I’m confident that with their leadership, we’ll be able to achieve great things for Spotify.

Personally, these changes will allow me to get back to the part where I do my best — spending more time working on Spotify’s future — and I can’t wait to share more about all things to come.

As part of this change, Dawn Ostrov I decided to leave Spotify. Dawn has made a huge mark on not only Spotify, but the audio industry in general. Through their efforts, Spotify has grown our podcast content 40-fold, driven major innovations in the medium and become the leading music and podcast service in many markets. These investments in audio have opened up new opportunities for music and podcast creators, and sparked new interest in the potential of Spotify’s audio ads. Thanks to its work, Spotify has been able to innovate in the ad format itself and double the revenue of our ad business to €1.5 billion. We are extremely grateful for the pivotal role she played and wish her every success. In the near term, Dawn will take on the role of Senior Advisor to help facilitate this transition. Alex will be responsible for the content, advertising and licensing work going forward and you’ll hear more from him on the matter.

The need to become more efficient

This brings me to the second update. As part of that effort, and to bring our costs more in line, we’ve done work A difficult but necessary decision To reduce the number of our employees.

Over the next several hours, you will have one-on-one conversations with all affected employees. And while I think this decision is appropriate for Spotify, I understand that with our historical focus on growth, many of you will see this as a shift in our culture. But as we evolve and grow as a business, our way of operating must be while staying true to our core values.

To offer some perspective on why we made this decision, in 2022 Spotify’s OPEX growth has more than doubled our revenue growth. That would have been unsustainable in the long term in any climate, but with such a challenging macro environment it would be difficult to bridge the gap. As you well know, we’ve made great efforts over the past few months to control costs, but it simply wasn’t enough. So while this is clearly the right path for Spotify, it doesn’t make it any easier — especially when we consider the many contributions these fellows have made.

Like many other leaders, I hoped to maintain the strong tailwinds of the pandemic and believed that our broad global business and reduced risk of the impact of a slowdown in advertising would isolate us. In hindsight, I was very ambitious to invest before our revenue grew. Because of this, today we are reducing our employee base by approximately 6% across the Company. I take full responsibility for the moves that got us here today.

My focus now is to ensure that every employee is treated fairly when they leave. While Katharina It will provide more detail on all specific details about the ways in which we are committed to supporting talented bandmates, and the following will apply to all affected employees:

  • severance pay: We will start with a baseline for all employees so that the average employee receives approximately 5 months of termination. This will be calculated based on local notice period requirements and the employee’s length of service.
  • PTO: All accumulated and unused leave of any departing employee will be paid.
  • Health Care: We will continue to cover health care for employees during their term of employment.
  • Immigration support: For employees whose immigration status is related to their job, HRBPs work with each affected individual in coordination with our mobility team.
  • Functional support: All employees will be eligible for two months of external services.

What’s Next

In nearly every respect, we accomplished what we set out to do in 2022 and our business overall continues to perform well. But 2023 marks a new chapter. I think because of these tough decisions, we’ll be in a better position for the future. We have ambitious goals and nothing has changed in our commitment to achieving them.

We’ve come a long way in our efforts to build an inclusive platform for creators of all levels, but there’s still a lot more to be done. To truly become the destination of choice for creators, we need to continue to improve our tools and technologies, and explore new ways to help creators engage with their audiences, grow their careers, and monetize their businesses.

In fact, looking at our roadmap, with the changes we’re making and what we plan to share at our upcoming Stream On event, I’m confident that 2023 will be a year where consumers and creators will see a steady stream of innovation unlike anything we’ve delivered in the past several years. I will be sharing more about these exciting developments in the coming weeks.

Finally, I hope you’ll join me tomorrow at Unplugged.

And again, for those of you leaving, thank you for all you’ve done for Spotify and I wish you every success in the future.

– Daniel

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