Spotify Stock (NYSE:SPOT)
As part of a larger reorganization, music streaming service Spotify (NYSE:SPOT) revealed on Monday that it would be laying off around 6% of its employees and that a top executive would leave the firm.
CEO Daniel Ek said in a note to staff that Chief Content & Advertising Business Officer Dawn Ostroff will leave the firm after serving as a senior adviser to the business for the next few months.
Ek went on to say that Alex Norstrom, Spotify’s Chief Freemium Business Officer, and Gustav Soderstrom, Spotify’s Chief Research & Development Officer, will be elevated to co-presidents and take on new positions and duties as a result of the promotion.
Ek said in the internal message that “Personally, these changes will enable me to go back to the part where I do my best work—spending more time focusing on the future of Spotify—and I can’t wait to talk more about all of the things we have planned.”
Spotify (NYSE:SPOT) said that the company will incur between €35M and €45M in severance-related expenditures due to the layoffs.
Impacted employees will get about five months’ worth of severance pay, payment for accumulated and utilized paid time off, coverage for healthcare costs, continued assistance with immigration, and outplacement services for two months each.
In premarket trading on Monday, Spotify stock increased by over 4% to reach a price of $101.75.
The recent staff reductions at Spotify (NYSE:SPOT) are the most recent example of this trend among major technology businesses. Meta Platforms (NASDAQ:META) announced that it will lay off 11,000 workers by the end of 2017, while Amazon (NASDAQ:AMZN) announced earlier this month that it would lay off 18,000 staff.
Both Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) announced that they would be cutting the number of employees at their respective companies by 10,000 and 12,000, respectively, last week.
The investment company Jefferies downgraded Spotify stock and other companies in the interactive media industry earlier this month.
Featured Image: Freepik @ BillionPhotos