Days after mass layoffs, Spotify’s finance chief is out

Paul Vogel, CFO of Spotify, leaves his post on March 31, 2024, the company announced yesterday (Dec. 7), says he is no longer the right fit.

Vogel joined the Swedish streaming service as head of investor relations in 2016 and has been in his current role since 2020. But as the company has spent the past two years trying to rein in spending while also funding growth opportunities, “I’ve talked a lot with Paul about the need to carefully balance these two goals,” Spotify CEO Daniel Ek said. , said. “Over time, we came to the conclusion that Spotify was entering a new phase and needed 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 assume “additional responsibilities” while the company begins an external search for Vogel’s permanent replacement.

The decision comes just three days after the company announced it third and largest layoff of 2023 in an effort to become “relentlessly resourceful”, according to Ek. Because most of its streaming earnings end up in the hands of major record labels, Spotify struggles to find a consistent path to profitability.

Quotable: Spotify’s expenses and funding “exploded”

“Spotify’s superpower was combining engineering breakthroughs with organizational capabilities – it organized creators and copyright owners to build an entirely new economic model in which everyone was involved. During its heyday, it applied these powers to new markets such as podcasts, audiobooks, and live chat rooms. The operating expenses and funding for content has exploded. It is now sorting out what is built to last and what is built for the bubble.”

—Mason Morfitpartner, CEO and chief investment officer at ValueAct, told the Financial Times when the activist investor bought a stake in Spotify in February 2023.

Spotify’s streamlining, by the numbers

17%: Spotify laid off part of its global workforce on December 4

€32 million ($34 million): Spotify’s operating profit for the three months ended September 30—its first profitable quarter in more than a year of loss making— The search for a new financial officer therefore comes from a “position of strength”, Ek said

200: Employees laid off in June at Spotify’s podcast division—a high-investment area the company has splurged on more than $1 billion. It was after the company already laid off 600 people across departments in January.

2: Award-winning podcasts (Heavy weight and stolen) which Spotify canceled on December 5, as part of its plan to take a step back from original programming. They will last until the end of their current seasons.

Fun fact: Vogel made millions

Less than 24 hours after the latest mass fire, 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 announced yesterday (December 7) 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 staff faced the axe, according to Bloombergthat broke the news.

Spotify and Tidal are not isolated examples. During 2023, Pandora owned by SiriusXM, SoundCloudand Amazon Music all trimmed their workforce for greater efficiency.