Spotify latest tech name to cut jobs, axes 6 per cent of workforce

LONDON –

Music streaming service Spotify stated Monday it is chopping 6% of its world workforce, changing into yet one more tech firm resorting to layoffs because the post-pandemic financial outlook weakens.

CEO Daniel Ek introduced the restructuring in a message to staff that was additionally posted on-line.

As a part of the revamp involving a administration reshuffle, “and to bring our costs more in line, we’ve made the difficult but necessary decision to reduce our number of employees,” Ek wrote.

Big tech firms like Amazon, Microsoft and Google introduced tens of hundreds of job cuts this month because the financial growth that the business rode throughout the COVID-19 pandemic waned.

Stockholm-based Spotify had benefited from pandemic lockdowns as a result of extra folks had sought out leisure once they had been caught at residence. Ek indicated that the corporate’s business mannequin, which had lengthy targeted on progress, needed to evolve.

The firm’s working prices final yr grew at double its income progress, a niche that may be “unsustainable long-term” in any financial local weather, however much more tough to shut with “a challenging macro environment,” he stated.

Spotify made “considerable effort” to rein within the prices over over the previous few months, “but it simply hasn’t been enough,” he stated.

“I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us. In hindsight, I was too ambitious in investing ahead of our revenue growth,” Ek stated.

He stated that is why the corporate is chopping its world workforce by about 6%, with out giving a selected variety of job losses. Spotify reported in its newest annual report that it had about 6,600 staff, which means that 400 jobs are being axed.

“I take full accountability for the moves that got us here today,” Ek stated.

After years of heady progress, analysts say tech firms are being pressured to chop jobs in preparation for an financial dowturn that is more likely to lower demand for his or her software program, services and cut back digital advert spending.

Just final week, Google introduced it was slashing 12,000 jobs whereas Microsoft stated it will cull 10,000 staff, bringing to not less than 48,000 the variety of cuts that Big Tech firms introduced in January alone.

In early buying and selling, shares of Spotify added 4.2% to $102.01.