Life is good at Spotify HQ. The streaming giant closed out its first full year of profitability in 2024 while growing listeners to a new record. Just over a year after laying off 1,500 of its workers and parting ways with its CFO in a major efficiency drive, the renewed good feeling at the group might be best epitomized by its new finance chief’s unusually casual attire.
Spotify reported its 2024 full-year earnings on Tuesday, hitting record revenues of €15.7 billion ($16.3 billion) and realizing its first profit of €1.4 billion ($1.5 billion) as it grew monthly active users to 675 million listeners, beating expectations. The results helped Spotify’s share price rise more than 10% in Tuesday morning trading.
It seems that Spotify’s freshly installed CFO, Christian Luiga, has been quick to adapt his wardrobe to a company with a reported average age of 34 and a newly mature set of financial accounts.
Luiga was unveiled at Spotify’s third-quarter earnings call in November last year. He joined Spotify from the Swedish defense company Saab AB., where he was also CFO.
In addition to praising Spotify’s ability to innovate, Luiga described the company as “fun” after facing a question on how he had adapted to early life at the group. Indeed, his description is likely a switch from how he would have described fighter jet-making Saab.
Ek added: “think the main thing people can see from Christian coming in is he used to have a suit and tie on every day, and as evident from Spotify’s culture, he’s now sitting in T-shirts. So we’re loving to see that difference in culture showing up.”
Luiga enters the Spotify fold
The conditions for Luiga’s arrival at CFO could scarcely have been better. His entrance followed the most painful cost-cutting exercise Spotify has ever had to carry out, saying goodbye to 17% of its workforce as part of its biggest-ever round of layoffs in December 2023.
Luiga’s predecessor, Paul Vogel, left the company shortly after those layoffs, but not before he cashed in shares worth $9 million as markets reacted positively to the headcount reduction.
Spotify faced some teething pains following the layoffs. The group didn’t hit all its metrics in the first quarter of 2024, partly because it underestimated the operational impact of the layoffs, Ek told investors last year.
The streamer’s chief HR officer explained to Raconteur in November that the layoffs came as a “shock to the system” for some employees.
Since then, however, Spotify has been vindicated by its brutal cost-cutting decisions. Shares in the group have increased more than 170% in the last 12 months, adding around $80 billion to Spotify’s value in the process.
Luiga is now expected to do a job his boss felt Vogel couldn’t.
Following Vogel’s dismissal, Ek said Spotify had in the two years prior worked on “spending more in line with market expectations while also funding the significant growth opportunities we continue to identify,” before giving an assessment of Vogel’s apparent inadequacies.
“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.”
T-shirt or suit, Luigia will be expected to deliver on those two points to keep Spotify coming back with fresh records next year.