Spotify’s finance chief Paul Vogel can now depend himself as probably the most high-profile casualty of the 1,500 staff to get the boot after Spotify mentioned it wanted a special route on the helm of its finance division.
Nevertheless, in response to a regulatory filing by the Swedish firm, his exit will likely be properly cushioned after he liquidated $9.4 million price of inventory on Tuesday at a median worth of almost $196 per share.
The day past traders bid up Spotify after studying the streaming service deliberate its biggest-ever headcount discount.
“We’ve come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences,” founder and chief govt Daniel Ek mentioned in a statement on Friday, suggesting a have to extra fastidiously steadiness spending with funding.
The Stockholm-based international chief in audio streaming mentioned it has launched an exterior seek for the successor of Vogel, who is because of depart the corporate on the finish of March.
It’s unclear whether or not he has already been relieved of duties as Spotify mentioned its vp of monetary planning and evaluation, Ben Kung, would tackle expanded obligations within the interim.
When reached by Fortune, the corporate declined to offer additional touch upon the circumstances or motivations behind Vogel’s sacking or what it means for the quick future.
Spotify misplaced its resourceful spirit
The CFO reshuffle comes after Ek introduced the corporate’s biggest-ever layoffs to return to its roots as a lean and scrappy underdog, when it punched above its weight and will accomplish extra with much less.
The information that Spotify would do away with each sixth worker, after already twice thinning out its ranks this yr, despatched shares hovering by a mixed 10% over the primary two buying and selling periods.
Vogel wasn’t the one one to revenue instantly from the layoffs, both.
The corporate’s basic counsel, Eve Konstan, in addition to an impartial director on the board additionally bought over $1.1 million and $521,000 in inventory, respectively, after the worth had already risen.
Insiders like Ek promoting $100 million in inventory in July can seldom be thought of a reassuring signal for traders, however it’s notably pernicious when the timing is ill-judged.
In Vogel’s case, the optics of cashing in instantly after lots of his colleagues realized they had been dropping their jobs seems questionable, although utterly authorized.
As painful because the company-wide layoffs are, Ek mentioned he took private duty for wielding the axe after his administration workforce initially debated a extra restrained method to job cuts.
In a letter to staff this week, Ek shared his considerations that the corporate had misplaced its resourceful spirit simply at a time when the price of procuring capital for progress was reaching dizzying heights.
Corporations like Spotify that want to lift funding—both by way of issuing new fairness or debt—should anticipate to pay a hefty premium if Wall Road can earn 4% or more risk-free just by lending to the U.S. authorities.
How greatest to finance Spotify’s operations cost-effectively beneath these more difficult situations is now not a priority for Vogel, although, as this responsibility will now fall to his successor.
“We look forward to tapping a strong financial leader as our next CFO,” Ek mentioned.
