Spotify To Axe 6% Of Its Workforce

streaming service for music As the economy continues to deteriorate, Spotify announces it is eliminating 600 positions or 6% of its global workforce. Spotify is just the latest tech corporation forced to reevaluate its pandemic-era expansion.

We’ve made the tough but necessary choice to cut our staff size as part of the redesign, which involves a management shake-up, “and to bring our costs more in line,” Mr. Ek wrote.

This month, major tech firms like Amazon, Microsoft, and Google made tens of thousands of employment losses as the COVID-19 pandemic-related economic boom began to fade.

The pandemic lockdown benefited Stockholm-based Spotify because more individuals had looked for entertainment while confined at home. Mr. Ek said that the business strategy of the corporation, which has long prioritized growth, needed to change.

The gap between the company’s operating costs and revenue growth last year was “unsustainable long-term” in any economic situation, but it would be significantly tougher to close in “a negative macro environment,” he said.

The efforts Spotify made to cut costs over the previous three months, according to Mr. Ek, “just haven’t been enough. “I intended to maintain the pandemic’s strong tailwinds and assumed that our extensive global business and lesser risk to the effects of a slowdown in advertising would protect us, according to Mr. Ek.

I should not have invested before our sales increased, in retrospect. He claimed it was the reason the business was reducing its global headcount by around 6%.

Although Mr. Ek could not provide an accurate number, a company representative estimated 600 job losses based on the 9,808 employees mentioned in the most recent quarterly report.

I fully accept responsibility for the actions that led to where we are now, Mr. Ek stated. After years of exuberant development, analysts claim IT businesses are being forced to slash staff in anticipation of a slowdown in the economy that will probably result in lower demand for their software, goods, and services as well as lower spending on digital advertising.

Google and Microsoft both announced job losses only last week, totaling 12,000 and 10,000 respectively. This brings the total number of layoffs disclosed by Big Tech companies in January to at least 48,000.

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The majority of tech companies are still far bigger than they were three years ago, despite all of the recent layoffs. Before the pandemic hit, Spotify had 4,405 employees, according to its annual report for that year.