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Amid its most serious push to date for budget efficiency, Spotify is reportedly dumping even more 4 World Trade Center office space under a new sublease agreement.
The New York Post and Commercial Observer just recently shed light on the streaming company’s latest sublease, following deals closer to the top of 2024 with payroll management business Rippling and language learning service Duolingo.
Now, the IPO-minded StubHub has gotten in on the expensive office-space action, taking a cool 103,000 square feet off Spotify’s hands at 4 World Trade, according to the mentioned outlets.
Consequently, StubHub, currently situated in a 44,000-square-foot space at 3 World Trade, will have over twice as much room as part of the Spotify sublease. Per the Post, StubHub is further set to maintain the right to expand at 4 World Trade down the line.
Once the StubHub sublease officially closes, Spotify will reportedly be occupying about half the 564,000 square feet of 4 World Trade that it initially leased. The video-curious business in its Q2 earnings filings pointed to $594.26 million/€543 million in total lease liabilities as of June 30th, 2024 – down from $630.42 million/€576 million on June 30th of last year.
For the same half-year stretch in 2024, Spotify identified $58.01 million/€53 million (including $2.19 million/€2 million in interest) worth of lease payments receivable. Of course, that’s a decidedly large figure for subleased offices – and it goes without saying that Spotify’s own total lease costs are substantial.
But the flashy spaces at hand will presumably keep on attracting image-minded public companies despite the uncertain economy and the fiscal benefits associated with opting for a humbler operational hub.
As noted, StubHub is plotting a listing but hasn’t yet executed the $16.5 billion plan. And Rippling, benefiting from a $13.5 billion valuation, is private but seemingly cash flush; execs in April unveiled an up to $590 million stock-repurchase program alongside a $200 million Series F.
Bringing the focus back to Spotify, shares in which fell substantially this morning and then rebounded past $324 apiece to finish the day, the continued sublease moves appear to underscore a broader commitment to tightening the belt (within reason).
Specifically on the office-space front, layoffs have been a key component of this belt-tightening effort for Spotify, which trimmed a whopping 17 percent of its workforce towards 2023’s conclusion. That move followed multiple other cutbacks, among them podcast cancellations and nixed products. Though it perhaps goes without saying, a smaller team will in turn allow for more modestly sized office accommodations, especially because Stockholm-based Spotify’s staff is hardly concentrated in the Big Apple.
