According to Spotify CEO Daniel Elk, his company is on an all-out effort to “drive more efficiency, control costs, and speed up decision-making,” due to which he has made significant structural changes to the company. Spotify has consolidated most of its engineering wing under Chief Product Officer Gustav Söderström, and business areas under Chief Business Officer Alex Norström. A blog post detailing these developments also reveals that Spotify’s content and ad business head Dawn Ostroff will leave the company as part of this restructuring.
Elk also revealed that through 2022, Spotify’s operating expenses grew twice as fast as the company’s revenue — which was unsustainable in the long run. He cites this as the primary reason for taking the difficult decision of letting 6% of the company’s staff go. According to The Verge, a 6% reduction in staff could mean nearly 600 individual jobs being lost, given that Spotify had a little over 9,800 full-time employees as per its last earnings report. Spotify employees affected by these changes will receive approximately five months of severance. They will also be compensated for all their unused leave time. The company will continue to cover the employees’ healthcare throughout the severance period and offer assistance to employees whose immigration status is tied to their employment status.
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