Spotify founder-CEO Daniel Ek will step down to become executive chairman in January, the Swedish streaming company said on Tuesday as it named longtime executives Gustav Soderstrom and Alex Norstrom as co-CEOs. The leadership change comes as Spotify expands into podcasts and audiobooks amid questions over how it will balance growth and profitability. Its shares fell about 3.4% in premarket trading. Spotify is the world's largest music-streaming service with more than 600 million monthly active users in 180 countries. Founded in 2006, it reported its first annual profit in 2024, benefiting from a mix of price increases and cost-cutting efforts. Ek will become executive chairman on Jan. 1 and has served on the board since 2008. He will focus on capital allocation and long-term strategy in what the company called a European-style chairman role. "The Spotify company is now profitable for over a year, and I think that all tells a story of a company that is in a great place," Ek said. "I'm still gonna be involved in the long arc of Spotify, so big strategic decisions, the big moments in the company, help advise and guide Gustav and Alex through that journey." Ek is one of Europe's most prominent tech entrepreneurs, having built Spotify into a rare global consumer technology leader from the region. Based in Stockholm, he is often cited as a champion of Europe's ability to produce companies that can compete with U.S. and Asian tech giants. Soderstrom, currently chief product and technology officer, oversees global tech strategy and product development, while Norstrom, as chief business officer, manages subscriber and advertising businesses along with music, podcast and audiobook operations. Both will join the board, subject to shareholder approval. They will report to Ek and will also serve on the board. Several high-profile firms such as Oracle and Netflix have adopted a co-CEO model to better manage their operations as they become more complex and globally diversified.
