Music streaming company Spotify to lay off 600 workers
Spotify Technology, the world’s largest music streaming company, has announced that it will lay off 6 per cent of its global workforce. During its last earnings report, the company had reported that it had 9,800 full-time employees, which would mean that about 600 employees will lose their jobs.
The company’s CEO, Daniel Ek, made the announcement in a memo to the staff on Monday (January 23).
This makes Spotify the latest tech company to downsize amid fears of a looming recession that has been exacerbated by the Russia-Ukraine war. The number of employees who have lost their jobs in the major technology companies in recent months seems to have crossed 2,00,000.
Daniel Ek said the layoffs were part of an organisational restructuring, with a view to increase efficiency, reduce costs, and speed up decision-making. “As part of this effort, and to bring our costs more in line, we’ve made the difficult but necessary decision to reduce our number of employees,” he wrote.
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The memo also said that the affected employees would receive an average of five months’ severance pay, during which time the company would continue to cover their healthcare costs.
The CEO wrote that he had hoped to withstand the financial pressures caused by a slowdown in advertising revenue, and that they had been too ambitious in investing ahead of revenue growth, and he accepted full accountability.
One of the high-profile exits is the company’s content and ad business chief, Dawn Ostroff, who Ek credited with increasing Spotify’s podcast content by “40x.”
Spotify had invested heavily in podcasts and, recently, in audiobooks in a bid to attract more users onto its platform. As of its last earnings release, Spotify had 195 million premium subscribers and 456 million monthly active users.
The company reported an operating loss of around $248 million in the last quarter.
