Spotify chief who signed Sussexes exits amid layoffs
THE Spotify executive who signed a multimillion-dollar podcast deal with the Duke and Duchess of Sussex is to leave the business amid mass layoffs.
Dawn Ostroff, the streaming company’s chief content and advertising officer, has “decided to depart Spotify”, according to Daniel Ek, chief executive.
Her exit came as the Stockholmbased company confirmed it would reduce its headcount by 6pc, with around 600 people losing their jobs.
Mr Ek, 39, said in a blog post: “In hindsight, I was too ambitious in investing ahead of our revenue growth.”
Ms Ostroff was the driving force behind Spotify’s investment in podcasting. She signed up the Sussexes’ Archetypes series in a reported $25m (£20m) deal with the couple’s production business, Archewell Audio, and oversaw an exclusive tie-up to bring comedian and podcast host Joe Rogan to the platform.
Under Ms Ostroff ’s guidance, Spotify spent roughly $1bn on exclusivity deals and acquisitions, including production company Gimlet. However, investors have begun to question the cost of the strategy amid mounting losses.
While Netflix recently cited the success of its Harry & Meghan documentary in helping to boost its financial results, Spotify’s deal with the Duke and Duchess has not had the same impact.
The Joe Rogan deal, said to be worth $200m, has also proved problematic. Artists including Neil Young pulled their music from Spotify in protest at what they claimed was Mr Rogan’s spreading of vaccine misinformation.
Facing growing pressure, the streaming company had already moved to cut back on podcast spending, laying off some of the production teams at the divisions in October last year.
The restructuring announced yesterday will see Ms Ostroff ’s role merged into the role of chief business officer. Mr Ek said the move would ensure “efficiency, cost controls and speed up decision making”.
Matt Deegan, an independent audio analyst, said Spotify had likely spent “over the odds” on buying up podcasting businesses and signing star celebrities to its app. Shares in Spotify rose 8pc in trading in New York. The company said the layoffs would cost between €35m (£31m) and €45m.
Meanwhile, shares in US software giant Salesforce rose 4pc in New York yesterday after it emerged that Elliott Management, the activist investor, had taken a stake.
Separately, Microsoft confirmed it had agreed to a “multibillion-dollar” investment in Openai, the start-up behind CHATGPT, the digital chatbot, as it seeks to push into new markets.