During 2023, Spotify was at its peak level of employment, with an average of over 9,000 global employees[1]. As of 2023 data, they generated 13.2 billion euros in revenue[2], served over 600 million monthly active users[3], and shipped product updates almost weekly. Behind that surface are 6 specialized departments doing very different jobs. Each one has its own leadership, its own KPIs, and its own logic. Knowing what each one does is how you understand how a modern company actually works.

Accounting: track every dollar

The accounting department records every expenditure (money going out) and every dollar earned. They prepare the financial statements that monitor financial conditions, with the main ones being income statements, balance sheets, and cash flow statements.

Spotify's accounting team has to track billions of micro-transactions: every stream, every artist royalty payment, every subscription. They produce the audited 20-F annual report Spotify files with the SEC every year. Without accounting, no one inside or outside the company can tell whether Spotify is actually making money or losing it.

Finance: secure and manage the money supply

The finance department is different from accounting. Finance focuses on where money will come from in the future and how to deploy it. They raise debt, manage cash, and use financial data to support proposals. Whether to invest more in podcasting, whether to raise prices, whether to acquire a competitor: finance models all of those choices and brings recommendations to the CEO.

Spotify's CFO leads the finance team and reports directly to CEO Daniel Ek. Their decisions shape how aggressively Spotify grows.

Human resources: build the workforce

The HR department recruits new employees, trains existing ones, and oversees performance evaluations. Their job: make sure the business has people with the right knowledge and skills to actually produce, market, sell, and manage finances.

For a large company like Spotify, HR is a massive operation. HR runs the entire pipeline: sourcing, interviewing, onboarding, training, performance management, and (when needed) layoffs. Spotify announced about 17% workforce reduction in late 2023[4]; HR ran the entire process.

Operations: deliver the product

The operations department manages the technical process of producing and distributing what the business sells. For a goods business, that means manufacturing and logistics. For a services business, it means delivery infrastructure.

Spotify's operations team runs the streaming infrastructure: servers, content delivery networks, encoding pipelines, music licensing operations. When you press play and a song starts almost instantly anywhere in the world, that's the operations team's work.

R&D: build what doesn't exist yet

The research and development department invents and improves products. They explore new features, test new technologies, and turn ideas into shippable products.

Spotify's R&D includes the personalization team that builds Discover Weekly and the AI DJ feature, the audio team that builds podcast tools, and the platform team that builds the underlying recommendation systems. R&D is where the company places bets on the future.

Sales and marketing: bring in customers and keep them

The sales and marketing department runs market research, develops sales strategies, manages the brand, and builds customer relationships. Their work attracts new customers and retains existing ones.

Spotify's marketing team runs the global brand campaigns, like Spotify Wrapped. The sales team works with advertisers, since the ad-supported tier is its own revenue stream alongside subscriptions. Together they're responsible for whether new users sign up and whether existing users stay.

How the departments fit together

Each department is good at one thing. The CEO's job is to make the 6 departments coordinate so the company moves in one direction. When sales says "let's lower the price," finance has to model whether the company can afford it, accounting has to track the impact, operations has to handle the load, R&D has to keep building, and HR has to keep hiring. Companies fail when the departments stop talking.

Quick recap

  • Accounting tracks earnings and expenditures and prepares financial statements.
  • Finance secures and manages funds; makes proposals based on financial data.
  • HR recruits, trains, and evaluates employees so the business has the workforce it needs.
  • Operations manages the production and distribution of products to customers.
  • R&D innovates around new and existing products and processes.
  • Sales and marketing conducts market research, runs sales, and builds customer relationships.

Try this week

Pick a company you might want to work at one day. Search "[company] careers" or "[company] open jobs." Notice how the open roles cluster around the 6 departments. Companies hiring lots of engineers are heavy on R&D and operations. Companies hiring lots of sales reps are heavy on sales/marketing. The hiring pattern tells you what they're betting on next.

References

  1. Spotify averaged 9,123 full-time employees in 2023 ("In 2023, 2022, and 2021, we had 9,123, 8,359, and 6,617 full-time employees on average, respectively"). Data as of FY ending December 31, 2023. Source: Spotify Form 20-F, Item 6.D "Employees," SEC EDGAR. sec.gov/Archives/edgar/data/1639920/000163992024000004/ck0001639920-20231231.htm
  2. Spotify 2023 revenue €13.2B. Data as of FY ending December 31, 2023. Source: Spotify Q4 2023 earnings press release Pg 26 (twelve months ended). s29.q4cdn.com/175625835/files/doc_financials/2023/q4/Shareholder-Deck-Q4-2023-FINAL.pdf
  3. Spotify had 602 million monthly active users (MAUs), including 236 million Premium Subscribers, across 184 countries and territories as of December 31, 2023. Data as of FY ending December 31, 2023. Source: Spotify Form 20-F, Pg 35, SEC EDGAR. sec.gov/Archives/edgar/data/1639920/000163992024000004/ck0001639920-20231231.htm
  4. Spotify announced ~17% workforce reduction in December 2023, ~1,500 employees affected. Data as of December 4, 2023 announcement. Source: Spotify Newsroom (Daniel Ek memo). newsroom.spotify.com/2023-12-04/an-update-on-our-organization/

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