layoffs
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Staff at Motown Records were hit with news of layoffs Thursday (Feb. 16) as the label gets reintegrated under the Capitol Music Group (CMG) umbrella, multiple sources tell Billboard. The number of people and departments affected are unknown as of press time.
A spokesperson for Motown Records confirmed the layoffs to Billboard. “As Motown returns to the Capitol family, certain positions that had been created when we became a stand-alone label have since become duplicative,” the person said in a statement. “These employees are leaving the company and our People, Inclusion and Culture department is helping them find new opportunities — either within or outside of UMG.”
Layoffs were feared by staffers since chairwoman/CEO Ethiopia Habtemariam’s sudden announcement of her departure on Nov. 29, at which point the future of Motown — which had been spun out of the Capitol Music Group into a standalone label in March 2021, with Habtemariam promoted to the top title — was unclear. In the weeks that followed, it emerged that Motown would be consolidated once again into CMG, at which point the prospect of layoffs loomed.
Motown had been under the CMG umbrella since 2014 when Universal Music Group (UMG) dissolved the Island Def Jam Music Group and moved Motown to Los Angeles to operate out of the Capitol Tower. Habtemariam, who had been president of Motown since that year, oversaw the shift from New York to L.A. and in 2015 led the signing of Motown’s landmark partnership with Atlanta-based Quality Control, which brought Migos, Lil Baby, Lil Yachty, City Girls and others to the label. That led to a surge in interest, signings and market share for Motown, resulting in the establishment of the label as a standalone frontline in 2021, with Habtemariam given the chairman/CEO title.
However, just 20 months after assuming that role, Habtemariam announced she was leaving UMG entirely to “pursue new endeavors,” departing a label that had been energized in recent years without a clear leader. As a standalone label, Motown maintained its own A&R and marketing departments, though it shared services such as radio promotion with Capitol.
CMG is run by Michelle Jubelirer, who was promoted from COO to chair/CEO in December 2021, succeeding Jeff Vaughn, who lasted just a year in the role. Jubelirer oversees a record group that also encompasses Blue Note, Astralwerks and Capitol Christian Music Group, in addition to Motown. While its market share remains under CMG, in September indie distributor Virgin was consolidated alongside Ingrooves and mTheory into the Virgin Music Group, whose co-CEOs report directly to UMG chairman/CEO Lucian Grainge.
However, Capitol will not have Quality Control in its purview moving forward, as the label was sold to HYBE America in a deal that was announced Feb. 8. That means that while Capitol will oversee Motown, it will not have any future releases from some of Motown’s biggest stars of the past decade.
Motown is the latest music company to undergo layoffs in recent months, as the global economy’s outlook remains uncertain. The tech sector was hit particularly hard in that respect, with Amazon, Google/YouTube, Spotify, Twitter, SoundCloud, BMI and others shedding jobs; many cited the dwindling advertising market, which has stubbornly retracted. In October, Grainge himself addressed the advertising market’s downturn when speaking about UMG’s third quarter financials, noting that ad-supported streaming revenue grew slower than expected, up just 5.2% over the third quarter period of 2021, though it was offset by increases in other sectors such as subscription, licensing, tour merchandising and publishing.
In 2022, Motown had raised its overall market share to 0.97%, up from 0.90% in 2021. In terms of current market share — music released over the most recent 18 months — Motown grew its share from 1.18% in 2021 to 1.33% in 2022. It had remained part of Capitol’s market share during that period, despite its ostensible status as a standalone entity. Capitol’s overall market share declined from 6.81% in 2021 to 6.40% in 2022, while its current share dropped from 5.64% in 2021 to 4.97% in 2022.
Additional reporting by Gail Mitchell.
Spotify’s Dawn Ostroff praised the growth of the audio giant’s podcasting expansion shortly after CEO Daniel Ek revealed a major leadership reorganization on Monday morning that will see Ostroff exit the company.
The reorganization, accompanied by a round of layoffs that will impact roughly 600 employees, involves consolidating Spotify’s business operations under co-president Alex Norström, who most recently oversaw the company’s freemium business. Ostroff, who joined Spotify in 2018 from Condé Nast Entertainment, will transition to an adviser role before formally leaving the company as her divisions now fall under Norström’s purview.
In a note to staff, obtained by The Hollywood Reporter, Ostroff praised Norström and reflected on the growth and impact of Spotify’s podcasting team, writing that the platform’s original and exclusive shows — which includes hits like The Joe Rogan Experience, Call Her Daddy and the original series Caso 63 — account for roughly 20 percent despite representing about 0.05 percent of shows on the platform.
“I’m so proud that we’ve built a home for creators to bring their art to the world in ways no one could have previously imagined. And while I’m very much excited about my next step, working alongside and learning so much from so many of you has been a privilege,” Ostroff wrote. “The memories of the moments, the stress, and the laughter we shared have helped me grow and better appreciate the journey … and for that, I will always be grateful. I wish you every success on the next chapter of the Spotify story.”
Read the full memo below.
Looking back on the past four and a half years, I am incredibly proud of what we’ve built together. It’s our best-in-class music operation where we have strengthened our relationships across the business, earned the respect of the industry, and become great partners. The entire music team is the heart and soul of this company.
Working together, our podcasting team has revolutionized the space. This organization’s trajectory has been astonishing, going from practically zero market share and a handful of podcasts, to the leading platform with more than five million podcasts today and a 30x increase in podcast consumption on the platform. And I’m really proud of what we have built with our original and exclusive shows–despite being just .05% of the number of shows on the platform, they account for ~20% of consumption. This includes a string of hits that had Spotify O&E shows occupy 6 of the top 10, and 24 of the top 100 slots on our global charts in 2022. In addition, we’ve learned so much from creators about the opportunities in video as we’ve seen the numbers surge.
Over the past two years, we’ve modernized the advertising business to make it essential to brands and clients. And we have delivered, doubling our ad revenue to well over a billion euros in the process. The technology and innovation that the global ad and sales team has brought to market ensures that there will be billions more to come. That growth is set to change the marketplace forever, especially under the strong leadership of my dear friend Alex, who has my every confidence.
We’ve championed marginalized voices and worked to drive much-needed change in the audio industry. I’m so proud that we’ve built a home for creators to bring their art to the world in ways no one could have previously imagined. And while I’m very much excited about my next step, working alongside and learning so much from so many of you has been a privilege. The memories of the moments, the stress, and the laughter we shared have helped me grow and better appreciate the journey … and for that, I will always be grateful. I wish you every success on the next chapter of the Spotify story.
Dawn
This story was originally published on THR.com.
Spotify Technology SA said on Monday it would cut its workforce by 6% amid a broader leadership shuffle, according to a filing with the U.S. Securities and Exchange Commission.
The company said it estimates 35-45 million euros ($38-$49 million USD) of charges related to letting these employees go, and that its chief content & advertising business officer Dawn Ostroff will also leave the company. Ostroff will act as a senior adviser helping to facilitate the reorganization, which will include Alex Norström, currently freemium business officer, and Gustav Söderström, currently chief research & development officer, becoming co-presidents of Spotify.
Spotify is the latest big tech company to announce a wave of layoffs, following a similar announcement by Google parent company Alphabet, which said last week that it would let go of some 12,000 workers.
Companies, including Spotify and Alphabet, staffed up during the pandemic and are now looking to cut costs amid slowing global economic growth.
Spotify employed 9,800 employees, according to recent filings. The company will announce its most recent quarterly earnings on January 31.
Several music companies let go of staff or cut investment budgets in the second half of 2022 in preparation for a possible economic downturn. Spotify said it would cut hiring by 25%, SoundCloud laid off 20% of its staff and BMI said it was cutting just under 10% of its total workforce, through a combination of letting 30 people go and leaving certain jobs unfilled.
Google is laying off 12,000 workers, or about 6% of its workforce, becoming the latest tech company to trim staff as the economic boom that the industry rode during the COVID-19 pandemic ebbs.
Alphabet CEO Sundar Pichai, the parent company of Google, informed staff Friday at the Silicon Valley giant about the cuts in an email that was also posted on the company’s news blog.
It’s one of the company’s biggest-ever round of layoffs and adds to tens of thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent Meta and other tech companies as they tighten their belts amid a darkening outlook for the industry. Just this month, there have been at least 48,000 job cuts announced by major companies in the sector.
“Over the past two years we’ve seen periods of dramatic growth,” Pichai wrote. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”
He said the layoffs reflect a “rigorous review” carried out by Google of its operations.
The jobs being eliminated “cut across Alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” for the layoffs.
Regulatory filings illustrate how Google’s workforce swelled during the pandemic, ballooning to nearly 187,000 people by late last year from 119,000 at the end of 2019.
Pichai said that Google, founded nearly a quarter of a century ago, was “bound to go through difficult economic cycles.”
“These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he wrote.
There will be job cuts in the U.S. and in other unspecified countries, according to Pichai’s letter.
The tech industry has been forced to freeze hiring and cut jobs “as the clock has struck midnight on hyper growth and digital advertising headwinds are on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi and John Katsingris wrote Friday.
Just this week, Microsoft announced 10,000 job cuts, or nearly 5% of its workforce. Amazon said this month its cutting 18,000 jobs, although that’s a fraction of its 1.5 million strong workforce, while business software maker Salesforce is laying off about 8,000 employees, or 10% of the total. Last fall Facebook parent Meta announced it would shed 11,000 positions, or 13% of its workers. Elon Musk slashed jobs at Twitter after after he acquired the social media company last fall.
Those job cuts are hitting smaller players as well. U.K.-based cybersecurity firm Sophos laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase cut 20% of its workforce, about 950 jobs, in its second round of layoffs in less than a year.
“The stage is being set: tech names across the board are cutting costs to preserve margins and get leaner” in the current economic climate, the Wedbush analysts said.
Employment in the U.S. has been resilient despite signs of a slowing economy, and there were another 223,000 jobs added in December. Yet the tech sector grew exceptionally fast over the last several years due to increased demand as employees began to work remotely.
CEOs of a number of companies have taken blame for growing too fast, yet those same companies, even after the latest round of job cuts, remain much larger than they were before the economic boom from the pandemic began.
Microsoft is the latest technology giant to lay off scores of employees as the entire sector continues to restructure itself in the name of profitability over growth.
Microsoft CEO Satya Nadella announced that the company will lay off approximately 10,000 employees, beginning Wednesday. The layoffs, which will be completed by the end of Q3, will represent a bit less than five percent of the company’s workforce.
Nadella said that affected employees will receive “above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services and 60 days’ notice prior to termination, regardless of whether such notice is legally required.”
Microsoft is a video game giant, owning the gaming platform Xbox and studios like Bungie and games like Minecraft. It is also in the midst of a proposed $69 billion purchase of Activision Blizzard, which is facing regulatory opposition.
Microsoft is also seeking to become a major player in advertising and is Netflix’s global ad sales and technology partner.
In his memo, Nadella outlined the rationale for the cuts, hitting similar themes to other CEOs over the last few months.
“As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” he wrote. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.”
Microsoft is just the latest tech giant to cut back. Amazon said earlier this month it would cut 18,000 employees, while Facebook and Instagram owner Meta announced plans to cut 11,000 employees last year. Snap, Twitter and Netflix also made significant cuts last year.
But Nadella also sought to rally the troops as the company moves forward.
“When I think about this moment in time, the start of 2023, it’s showtime—for our industry and for Microsoft. As a company, our success must be aligned to the world’s success,” he wrote. “That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from. If we deliver on this, we will emerge stronger and thrive long into the future; it’s as simple as that.”
Read Nadella’s memo on THR.com
Amazon is set to lay off more than 18,000 workers, CEO Andy Jassy said in a note to employees Wednesday.
The majority of the cuts will impact staffers in the Amazon Stores and People Experience and Technology divisions, the latter of which includes teams involved in Human Resources. Impacted employees will be contacted beginning Jan. 18, though the company had already begun laying off staff in November across its devices and books businesses, which include products like Alexa, Fire TV and Kindle.
The 18,000 figure — which represents roughly 1.2 percent of Amazon’s 1.5 million global workforce, as of last September — is larger than the latest reported layoff figures at the e-commerce giant; in November, timed to the earlier round of cuts, the company was expected to cut around 10,000 roles.
“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” Jassy said in his note, which was shared publicly Wednesday evening after the Wall Street Journal first reported the updated figures. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles.”
Amazon most recently reported an earnings miss for the third quarter, with net income falling from $3.1 billion to $2.9 billion year over year. The company has continued its big spending in entertainment with deals for the NFL’s Thursday Night Football, which is commanding a $1 billion yearly spend for the streaming rights, and the $465 million price tag for the first season of Lord of the Rings: The Rings of Power. Last year, Amazon also closed its costly $8.5 billion acquisition of the MGM studio.
But the tech and e-commerce behemoth is not alone in facing the negative impacts of an ongoing downturn. In November, Meta said it would lay off 11,000 staffers, or roughly 13 percent of its workforce. Earlier Wednesday, Vimeo and Salesforce announced layoffs ranging in the 10 to 11 percent range, respectively.
This article was originally published by The Hollywood Reporter.
SiriusXM is planning cost-cutting measures for the new year — including, potentially, job cuts, the satellite radio service told staff during a company-wide Zoom meeting this week.
SiriusXM CEO Jennifer Witz said the company is reviewing “where there is room for improved efficiency,” as it weighs how to handle macroeconomic challenges like declining advertising budgets and auto manufacturer delays while still investing in a near-total rebuild of its technology infrastructure.
“The results of this review will highlight the other areas where we may need to reduce spending, and it may indicate the need for staff reductions,” Witz said on the Nov. 28 call, according to notes from the call reviewed by Billboard and verified by a spokesperson.
“In the meantime, we need to closely evaluate our hiring needs and be purposeful in prioritizing roles that align with our strategic initiatives.”
This comes amid a wave of music companies announcing layoffs, including Spotify, SoundCloud, BMI and Anghami, as all prepare for a possible economic downturn.
SiriusXM said its cost-cutting review is currently underway. While it has not finalized any decisions on how many jobs would be cut or from what divisions, Witz said the results of the review are expected in the new year.
During Witz’s roughly two years as CEO, SiriusXM has hired about 1,500 new employees, bringing the company’s total headcount to just under 5,700, according to filings.
SiriusXM reported last month that profits fell in the third quarter from a year ago due to a slowdown in Pandora subscriber revenue and higher expenses from investments in podcasting and technology. Third quarter revenues were up overall, as the company’s total subscribers rose to 34.2 million.
The company is in the process of updating the back-end technology and user-friendliness of its SiriusXM app, Witz said during a presentation at the investor day for SiriusXM’s parent company Liberty Media on Nov. 17. Updating the app’s infrastructure so that the company can bring new products to the app quickly is a key part of the company’s growth strategy.
“[The new app] takes the ease and connection we have in-car and extends it everywhere our subscribers go while inviting new listeners in as our standalone streaming business continues to grow,” Witz said at the investor day. She also acknowledged the “challenging macroeconomic environment where we are seeing headwinds in both the ad market and auto industry,” and said those issues are forcing the company to run leaner in certain areas in order to prioritize investing in growing SiriusXM’s audiences.
Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.
The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that hired rapidly during the pandemic.
Zuckerberg as well said that he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic ended.
“Unfortunately, this did not play out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
Of particular concern to investors, Meta poured over $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Spooked investors have sent company shares tumbling more than 71% since the beginning of the year and the stock now trades at levels last seen in 2015.
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes as well. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Some of the pain is company-specific, while some is tied to broader economic and technological forces.
Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses.
Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also an a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.
“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint,” Zuckerberg said. ”We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
A hiring freeze at the company will be extended through the first quarter of 2023, Zuckerberg said. The company has also slashed its real estate footprint and he said that with so many employees working outside of the office, the company will transition to desk sharing for those that remain.
More cost cuts at Meta will be rolled out in coming months, Zuckerberg said.
Zuckerberg told employees Wednesday that they will receive an email letting them know if they are among those being let go. Access to most company systems will be cut off for people losing their jobs, he said, due to the sensitive nature of that information.
“We’re keeping email addresses active throughout the day so everyone can say farewell,” Zuckerberg said.
Former employees will receive 16 weeks of base pay, plus two additional weeks for every year with the company, Zuckerberg said. Health insurance for those employees and their families will continue for six months.
Shares of Meta Platforms Inc. jumped almost 5% before the opening bell Wednesday.