Following massive layoffs this week, Spotify's Chief Financial Officer, Paul Vogel, is leaving the company. According to company CEO Daniel Ek, Vogel lacked the "requisite experience" to help the company in its expansion and meeting market expectations. Spotify is looking for Vogel's successor. Meanwhile, Ben Kung, Vice President of Financial Planning and Analysis, will take on expanded responsibilities to support the company’s realignment of its financial leadership team.
“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. 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. As a result, we’ve decided to part ways, but I am very appreciative of the steady hand Paul has provided in supporting the expansion of our business through a global pandemic and unprecedented economic uncertainty,” Daniel Ek, Founder, Chief Executive Officer and Chairman of the Board of Directors, said in a statement.
Vogel had joined Spotify in 2020, and is set to leave the company in March 2024, aligning with Spotify's shift towards prioritising margin over growth.
“As we initiate the search for a new leader, we do so from a position of strength. I am enormously proud of the strides we’ve made as a company. We are on track to deliver against the goals we outlined at our Investor Day and our recent actions will help us accelerate these efforts. We look forward to tapping a strong financial leader as our next CFO and I will share more details soon," he noted.
Earlier this week, the music streaming giant announced it is planning to trim around 17 per cent of its overall workforce as a cost-cutting measure amid significantly slower economic growth. As conveyed in a message by Spotify CEO Ek to staff on December 4, this step reflects the company's ongoing commitment to cost management. This move comes despite Spotify achieved a noteworthy operating profit of €32 million in the third quarter (Q3) of 2023, also its first profitable quarter in the past two years.
The company CEO, in the note, reflected on 2022 and 2023, and mentioned that Spotify's achievements have been "remarkable". A significant portion of this success is tied to having increased resources. The company was more productive by many measures, but noted that efficiency also needs to be a priority moving forward.