Photo Credit: Glenn Villas
Following a 17% reduction in workforce and the exit of CFO Paul Vogel, Spotify CEO Daniel Ek is not mincing works on his way to profitability.
Spotify shed around 1,500 people from its workforce of 9,000 earlier this week, sending another shockwave through the industry. Yesterday, Spotify CFO Paul Vogel exited the company effective March 2024—selling off nearly $10 million in stock before the revelations were made public. Vogel was appointed to the CFO position in January 2020—but Daniel Ek doesn’t appear to have been happy with his peformance.
According to an internal memo to Spotify employees that was leaked to Business Insider, Ek did not mince words. “By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a ways to go before we are both productive and efficient.”
“Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” the memo calls out. “More people need to be focused on delivering for our key stakeholders—creators and consumers. In two words, we have to become relentlessly resourceful.”
Ek shares that he believes Spotify has moved away from its core principle of resourcefulness that helped it win out in its early days. “We had limited resources and had to make the most of every asset. After announcing Vogel’s departure, Ek says Spotify needed a CFO with a “different mix of experiences” to help bring the company “in line with market expectations.”
Spotify’s most recent quarter reported a profit of $69 million with an 11% year-over-year jump in revenue to $3.6 billion. Spotify narrowed its operating costs by 13% compared to the previous year. The company now has 574 million monthly active users—more than two million more than expected.