The spreadsheet revealing who got cut at Spotify

Well, it’s been a messy, messy week. Today, I have a look at the departure of Spotify CFO Paul Vogel, who (as first reported by Podnews) sold millions worth of stock on Tuesday. Plus, other key Spotify layoffs and the podcast download fallout of Apple’s iOS 17.

In an absolutely chaotic week for Spotify, the biggest layoff of all dropped on Thursday evening: Paul Vogel, who has been the company’s CFO for nearly four years, will leave in March. The news, which came after it was disclosed that he had sold $9.38 million worth of shares the day after the layoffs, was delivered by an atypically terse press release that made it clear Spotify’s leadership wasn’t satisfied with Vogel’s ability to do the job.

“Spotify has embarked on an evolution over the last two years to bring our spending more in line with market expectations while also funding the significant growth opportunities we continue to identify,” CEO Daniel Ek said in a statement. “I’ve talked a lot with Paul about the need to balance these two objectives carefully. Over time, we’ve come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences. As a result, we’ve decided to part ways.”

Executives often preplan stock sales, either specifically timed or triggered by a stock price. But Spotify declined to confirm whether Vogel’s sale was previously planned, and his departure being announced the same day his filing started making the rounds suggests either some highly coincidental timing or disapproval inside Spotify due to the transaction’s poor optics.

The release says that Ben Kung, VP of financial planning and analysis, will take on more duties in managing the company’s finances until Vogel leaves. But it does not appear that he is in line to be Spotify’s next CFO, as the company is conducting an external search.

Vogel managed Spotify’s balance sheet as it gobbled up podcast companies like Megaphone and The Ringer and invested heavily in its non-music offerings, often testing the patience of investors who wanted to see the company be more profitable. Spotify may be better off with an accountant rather than someone like Vogel, who has an investor relations background.

His time at Spotify was apparently up anyway. But everyone I have spoken with agrees that the optics of orchestrating a layoff that cuts 17 percent of the staff, seeing the stock reach its highest level in almost two years on that news, and then selling enough stock to buy a gently used private jet are not good. If he was going to have a graceful exit, this was not it.

Vogel is the highest-profile executive leaving, but he is certainly not alone. Taj Alvi, Spotify’s global head of marketing, is out, as first reported by Bloomberg. I reported on Tuesday that the company’s head of brand safety, Dave Byrne, is also gone. The head of content operations for Spotify Studios, Valentina Powers, is also out, according to a spreadsheet floating around of those who have been laid off. Powers was a longtime operations director at New York Public Radio before joining Spotify in 2021.

The document is self-reported and by no means covers all the cut positions (it currently lists about 525 employees out of 1,500 cut), but you can see that product and marketing roles are heavily represented. One person impacted by the layoffs, who chose to remain anonymous, said that many product teams have been “dismantled.”

Although Wall Street is generally pleased about how the layoffs have played out (the stock is nearly 10 percent higher than it was prior to the announcement), one analyst I spoke with warned that the instability caused by the layoffs could have an adverse effect.

“It will be hard for [Spotify] to not lose a lot of momentum as a business because of the internal turmoil caused by this move,” Arete Research senior analyst Richard Kramer told Hot Pod, noting that some of the company’s most skilled executives were let go. “You are left with a worse business, with a temporarily lower cost base.”

In non-Spotify news, podcast downloads are still funky following the release of iOS 17 in September. Experts warned that it would take time for download numbers to adjust, and November exhibited the largest impact yet. According to Podtrac, total downloads for the top 20 publishers were down 15 percent month over month and 19 percent year over year thanks in large part to iOS 17.

The update made a small (but clearly impactful) change to the way its downloads work. Previously, if you subscribed to a podcast, forgot about it for a while, and then returned, it would automatically download all the intervening episodes. That would be the case whether you missed five episodes or 200. The update made it so that once you return to a subscribed podcast, there would be no automatic downloads of those missed episodes.

For publishers, the drop is pretty remarkable. In August, iHeartMedia had 420.4 million downloads and streams; in November, it was 318.3 million. Wondery dropped from 187.7 million downloads in August to 136 million in November. Every publisher in the top 20 saw a decrease over those three months except for The Daily Wire, which has a popular app, and Disney (maybe because of football?).

Podtrac, which puts out a monthly chart of top participating publishers, reported double-digit drops in September and November and a more modest dip in October. According to Podtrac CEO Mark McCrery, these drops correlated with spikes in listeners updating to iOS 17. Additionally, “we’ve seen fewer downloads per user from the newer version of iOS, and the new version now has more users than the older version.” He says that about 75 percent of Apple Podcasts listeners are now on the new version, while 25 percent have still not downloaded the update.

So, that means there is good news and bad news. The good news is that, with three-quarters of Apple Podcasts listeners using the new version, there’s not that much fallout left to go. The bad news is that podcast ad sellers and buyers have been working with inflated numbers and now have to course-correct. Apple did not respond to a request for comment on this matter.

Last week, I included an item about The President’s Daily Brief, which is still charting (today, it is number seven on Spotify). First the correction: I said the studio that produces the podcast, The First, is Bill O’Reilly’s studio. O’Reilly hosts a show for The First but does not own it.

And the update: despite some listeners thinking that some of the audio is produced by AI, Chris Balfe, CEO of The First TV and Red Seat Ventures, told Hot Pod, “There’s no AI involved, but there is what Mike describes as a ‘pillow fort’ that he sometimes builds to help improve audio quality in a hotel somewhere on the globe.”

That’s all for today. Happy Hanukkah to those who celebrate, and see you next week.