Comments made by Spotify CFO Paul Vogel are prompting speculation that another round of layoffs could be on the way. Photo Credit: Austin Distel
Last month, after kicking off 2023 by trimming about six percent of its global workforce, Spotify announced approximately 200 podcasting layoffs. Now, CFO Paul Vogel has indicated that his company expects “headcount year over year to actually be down in Q3,” and some are speculating that additional personnel cutbacks could be on the way.
Vogel made the remark during Spotify’s Q2 2023 earnings call this morning. For background, 2023’s initial seven months have seen the Stockholm-headquartered business axe a number of evidently unprofitable divisions, original podcasts, and different offerings amid a broader push for profitability.
Notwithstanding these efforts and the adjacent layoffs, ValueAct Capital-backed Spotify posted heightened operating expenses (€1.013 billion, up 13 percent year over year) as well as a €247 million operating loss for the second quarter. In explaining the increases, the platform pointed in part to €91 million in once-off expenditures, including €25 million worth of severance packages (along with “related costs”) and a “real estate optimization plan.”
In any event, even with an adjusted operating loss of €112 million, it goes without saying that the former Soundtrap parent has a long way to go in order to meet the €45 million operating loss forecast it’s issued for Q3.
Bearing in mind the point, CFO Paul Vogel, in responding to a question about “opportunities to be more efficient while still ensuring you have the right level [of] investment to support revenue growth,” appeared to signal that more layoffs could be forthcoming.
“If you look at some of the changes we made both this quarter and [at] the beginning of the year,” communicated Vogel, “Q2 was the last quarter where we had headcount higher year over year. We expect our headcount year over year to actually be down in Q3.
“You know, we’ll see where that goes moving forward. But as Daniel said, we’re continuing to become more efficient. We’re continuing to find ways to innovate and launch new products and experiment at the current level. So we feel really good about where we are. So you will see some of that efficiency have even more of an impact in the back half of the year with respect to the OPEX [operating expenses].”
While time will reveal whether Spotify does in fact intend to cut ties with additional team members, it bears mentioning in conclusion that the business has hardly frozen hiring while pursuing enhanced operational efficiency.
To this point in July, for instance, the company seems to have posted approximately 120 job listings to LinkedIn. For 2022 – prior to the above-detailed layoff rounds – Spotify reported having an average of 8,359 full-time employees.