Spotify to cut employee base by approximately 17%

In a regulatory filing, Spotify announced a reduction in the company’s employee base by approximately 17%. As a result, the company estimates that it will incur approximately EUR 130M- EUR 145M in charges in the fourth fiscal quarter of 2023, primarily consisting of severance-related payments and the impairment of real estate assets as a part of optimizing the company’s office space footprint in connection with the reduction in the employee base, partially offset by forfeitures of equity awards by departing employees. The majority of the cash component of these charges will occur over the first and second fiscal quarters of 2024. The company anticipates that these actions will generate meaningful operating efficiencies going forward. Due to the charges, the company is updating its operating income outlook for the fourth fiscal quarter of 2023 to a range of (EUR 108M)- (EUR 93M).