Spotify on Monday morning became the latest tech company to announce a major round of layoffs. The Stockholm-based music streaming service is cutting 6 percent of its global workforce as part of a larger corporate restructuring aimed at improving efficiency.
In a blog post announcing the layoffs, CEO Daniel Ek said the company overestimated its ability to withstand the slowdown in advertising spending that came with an uncertain macroeconomic situation.
"In hindsight, I was too ambitious in investing ahead of our revenue growth," he wrote. "I take full accountability for the moves that got us here today."
Spotify benefited enormously in the early days of the pandemic, when shutdowns pushed users to spend even more time online, encouraging firms to make heavy investments.
Ek noted that operational expenditures were increasing at twice the rate of revenue growth, a situation "that would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap."
With Spotify's "historic focus on growth," Ek added that many will see the announcement as a shift in culture, but stressed the need to evolve as the business grows.
Along with the layoffs, Spotify is reshuffling its organizational chart. Gustav Söderström is taking over as chief product officer, and Alex Norström will become the chief business officer, essentially helping Ek run the day-to-day operations of the company as co-presidents.
In addition, Chief Content Officer Dawn Ostroff is stepping down.
"While we have made great progress in improving speed in the last few years, we haven’t focused as much on improving efficiency," wrote Ek in a blog post. "We still spend far too much time syncing on slightly different strategies, which slows us down."
Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process. iRobot said that it is being acquired by Picea through a court-supervised process. Picea is the company's primary contract manufacturer. The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
Wealthfront’s CFO Alan Iberman talks the $2.05B IPO and the major moment for robo banking as the company bets on AI, automation, and “self-driving money."
A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
