Spotify executive who signed Harry and Meghan exits as hundreds of jobs cut

The Spotify executive who signed a multimillion-dollar podcast deal with the Duke and Duchess of Sussex is to leave the business amid mass lay-offs.

Dawn Ostroff, the streaming company’s chief content and advertising officer, has “decided to depart Spotify”, according to chief executive Daniel Ek.

Her exit came as the Stockholm-headquartered company confirmed it would reduce its head count by about 6 per cent, with about 600 people losing their jobs.

Ek, 39, said in a blog post: “In hindsight, I was too ambitious in investing ahead of our revenue growth.”

Ostroff was the driving force behind Spotify’s investment in podcasting. She signed up the Sussex’s Archetypes series in a reported $US25 million ($38 million) deal with the couple’s production business Archewell Audio and oversaw an exclusive tie-up to bring popular comedian and podcast host Joe Rogan to the platform.

Under Ostroff’s guidance, Spotify spent roughly $US1 billion 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 of Sussex has not had the same impact.

After debuting as Spotify’s number one new podcast over the northern summer, by November the Duchess’s Archetypes podcast, featuring high-profile women such as Mariah Carey and Serena Williams, had slipped down its charts to number 22. The latest episode aired in November.

The Joe Rogan deal, said to be worth $US200 million, has also proved problematic. Artists including Neil Young pulled their music from Spotify in protest at what they claimed was Rogan’s spreading of COVID vaccine misinformation. Spotify was also forced to delete historic episodes of The Joe Rogan Experience podcast after clips emerged of Rogan using a racial slur, which he apologised for.

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.

Spotify chief Daniel Ek: “In hindsight, I was too ambitious in investing ahead of our revenue growth.”Credit: Bloomberg

The restructuring announced last week will result in Ostroff’s role merged into the role of chief business officer. 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. He said: “It’s no surprise they’re looking at what they spent on big deals and whether they need to do that going forward.”

Shares in Spotify rose 8 per cent in trading in New York. The company said the lay-offs would cost between 35 million euro ($57 million) and 45 million euro.

The company joins other tech businesses in making sharp cuts to head count after hiring rapidly during the pandemic. Last week, Google and Microsoft each announced thousands of lay-offs as growth across the tech sector slows.

In a letter to Google’s chief executive, Sundar Pichai, Sir Chris Hohn, the billionaire founder of The Children’s Investment Fund Management (TCI), said the tech company’s lay-offs did not cut deep enough to reduce bloat.

Hohn wrote: “The 12,000 jobs is a step in the right direction, but it does not even reverse the very strong head count growth of 2022.

“Ultimately management will need to go further.”

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