Earlier today, Storytel’s CEO Johannes Larcher shared the following note to Storytel employees
Dear team,
Today, on behalf of the Management Team, I need to make a difficult announcement.
What is happening?
We’ve decided that it is necessary to further optimize our cost structure, and to reduce the size of our team. This sadly means that we will be saying goodbye to approximately 80 team members within our streaming organization and group functions, representing 13% of our global workforce.
While we are convinced that this is what’s needed for our business, I also want to assure you that the Management Team and Board didn’t take this decision lightly or without properly discussing, reflecting and assessing the impact these necessary changes will have on our teams, operations and the individuals affected.
Why are we doing this?
During the past year our focus has been on building a strong and resilient company in order to successfully continue our mission to move the world through story. Storytel wouldn’t be the company it is today without all your hard work, commitment and dedication – and I’m incredibly proud and thankful for the strong progress we’ve achieved.
In reviewing our progress in 2023 and analyzing how each role within our company contributes to our priorities and plans for 2024, we’ve concluded that there are tangible opportunities to serve our subscribers, partners and shareholders even better and with higher efficiency going forward. Amongst others, these opportunities include:
- Aligning team size with our strategy more effectively
- Our profitable growth strategy is strictly focused on 10 core markets, and our content and marketing investments reflect that reality. Accordingly, we can support these markets with fewer team members, both locally and centrally.
- Improving efficiency of operational processes
- The progress made over the last year has increased efficiency across some of our operational units, enabling us to operate with leaner teams to deliver similar output
- Realigning team sizes to match our future needs
- We intend to rightsize some teams that have grown larger than needed in order to successfully execute our mission
- Redimensioning of teams to unlock higher levels of productivity
- We are choosing to reduce the size and reorganize certain teams to enhance agility and overall effectiveness
- Simplifying structures
- We see opportunities to reduce management layers and simplify structures in several areas
I also want to acknowledge the necessity of better equipping ourselves for the evolving landscape within our industry, and the need to better align our business with the expectations of both the market and our shareholders. To accomplish this, we must expedite our progress towards profitability and enhance our ability to generate meaningful cash flow at an accelerated pace. Doing so, will allow us to make essential investments into serving our subscribers even better tomorrow, ensuring their continued loyalty. This will ultimately create a more resilient company that can effectively compete and succeed for the long term.
Support for team members who are leaving us
We fully recognize that it is difficult and sad to say goodbye to so many valued team members. This process will be challenging, stressful and emotional for those leaving Storytel, and also for those remaining with the company. Our sincere goal is to handle this situation as seamlessly as possible to minimize any potential stress.
If you are among those impacted, you will receive a calendar invite today from your manager or someone representing your leadership.
For those leaving Storytel, we are committed to providing meaningful support throughout the transition. Our People team will be available for detailed consultations to address individual needs and concerns. Every departing team member will receive a severance package, consisting of the following components:
- Severance Pay: Severance pay will be determined based on local notice periods, legal obligations, and service duration.
- Career Support: A three-month coaching package will be provided.
- STI Program: Any 2023 STIP bonus will be paid to affected eligible team members, regardless of the termination date.
- Benefits: Full benefits will be maintained throughout the notice period.
- Vacation: Accrued and saved vacation will be compensated along with the final salary.
- IT Equipment: An option to purchase the work phone and/or computer will be extended at market price.
Moving forward
The upcoming weeks will no doubt bring some challenges as we make the necessary organizational adjustments and establish our go-forward organization.
Most importantly, and now more so than ever, we need to be laser focused on our mission, our 2024 plan, and our efforts to strengthen our performance and market position in the countries we operate in, so that we can continue to entertain and enrich the lives of millions of people around the world for the long term. We will communicate more details about our 2024 plans and priorities, as well as an update on a set of people-focused initiatives to strengthen our culture and workplace, in the next few weeks.
I acknowledge that it will take some time to digest the tough news shared today. Everyone within the Streaming and Group functions will shortly receive a calendar invite to a live stream session at 9.30am CET today with me and our Chief People Officer, Kristin Widell, during which we will share further context about these changes and the process that follows.
-johannes