Spotify workforce reduction to be viewed positively, says Piper Sandler

Piper Sandler analyst Matt Farrell keeps a Neutral rating on Spotify Technology with an $87 price target after the company announced it will reduce headcount by 6% across the organization and that Dawn Ostroff, its chief content and advertising business officer, will step away. The analyst is not surprised to see the headcount reduction given the current macro environment and the high investment levels from Spotify in 2022. Piper expects the move to be viewed positively among investors, as profitability and spend efficiency are key areas of focus. However, the analyst continues to look for multiple quarters of margin execution before getting positive on the shares.