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Spotify CEO Daniel Ek connected Tuesday acknowledged that layoffs nan audio streaming giant implemented successful December affected accumulation successful nan company's first quarter.
Ek described nan occupation cuts connected Spotify’s net telephone arsenic a "significant challenge" that nan Sweden-based institution contended with.
"Although there’s nary mobility that it was nan correct strategical decision, it did disrupt our day-to-day operations much than we anticipated," he said.
Spotify CEO Daniel Ek speaks during a property arena successful New York May 20, 2015. Spotify, which provides free on-demand euphony aliases ad-free tunes for paying customers, said it will now besides supply video contented and podcasts. (REUTERS/Shannon Stapleton / Reuters Photos)
Spotify’s layoffs successful December affected astir 1,500 workers, aliases 17% of nan company's full workforce.
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Ek told labor successful December that nan workforce simplification was meant to "align Spotify pinch our early goals and guarantee we are right-sized for nan challenges ahead." He besides said astatine nan clip that nan company’s costs building "for wherever we request to beryllium is still excessively big" contempt different initiatives to trim costs.
The institution had earlier trim astir 800 jobs crossed 2 rounds of layoffs that occurred successful January and June 2023, respectively, arsenic previously reported by FOX Business.
Ek acknowledged connected Tuesday that it "took america immoderate clip to find our footing" aft nan most caller headcount reduction "but much than 4 months into this transition, I deliberation we’re backmost connected track."
Spotify had earlier trim astir 800 jobs crossed 2 rounds of layoffs that occurred successful January and June 2023. (REUTERS/Dado Ruvic/Illustration/File Photo / Reuters Photos)
"I expect to proceed improving connected our execution passim nan year, getting america to an moreover amended spot than we’ve ever been," he told analysts and investors.
SPOTIFY PLANS TO RAISE PRICES LATER THIS YEAR: REPORT
Spotify antecedently issued guidance that it expected to person 618 cardinal full monthly progressive users successful nan first quarter. The fig totaled 615 cardinal MAUs.
Overall, Spotify had a "solid 4th driven by beardown gross growth, expanding gross separator and nan largest operating income we’ve ever posted," Ek said.
| SPOT | SPOTIFY TECHNOLOGY SA | 284.44 | -19.04 | -6.27% |
On apical of nan layoffs, Ek pointed to 2023’s MAU maturation arsenic a facet that contributed to the company not hitting its MAU maturation extremity successful nan first quarter.
In this photograph illustration nan streaming work logo Spotify seen displayed connected a smartphone adjacent to a brace of earphones. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
"The MAU and subscription maturation we achieved successful 2023 not only surpassed our astir eager forecast, but besides group a grounds for nan astir important personification maturation successful Spotify’s history," he said. "While we expect continuous robust maturation going forward, 2023 was a genuinely standout twelvemonth and should not beryllium a based connected anticipation for each consequent year."
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Spotify besides "probably pulled backmost excessively significantly" connected its trading spending successful 2023, thing Ek said nan audio streaming elephantine was "already correcting" successful nan 2nd quarter.
In nan 2nd quarter, nan institution anticipated it would spot 3.8 cardinal euros (about $4 billion) successful revenue and 250 cardinal euros (about $267 million) successful operating income.
