The latest tech company to announce a substantial round of layoffs is streaming giant Spotify.
The music service said it would cut its workforce by around 6% as part of broader cost-cutting measures, Spotify CEO Daniel Ek announced in a note to staff on Monday.
“As you are well aware, over the last few months we’ve made a considerable effort to rein in costs, but it simply hasn’t been enough,” Mr. Ek said. “So, while it is clear this path is the right one for Spotify, it doesn’t make it any easier.”
The reduction amounts to around 588 employees, according to MarketWatch. Like some of its tech competitors, Spotify hired aggressively during the pandemic and, now facing a different economic outlook amid recession fears, has been forced to scale back its headcount.
“Like many other leaders, 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,” Ek said.
“In hindsight, I was too ambitious in investing ahead of our revenue growth,” he added.
Ek said the company’s operating expenses in 2022 outpaced its revenue growth by two times.
Spotify, based in Sweden but listed on the New York Stock Exchange, has never posted a full-year net profit, according to BBC, despite being the number one music streaming service worldwide by total number of users.
Spotify also announced that Chief Content Officer Dawn Ostroff, who was responsible for growing the company’s podcasting business, would be departing. Ostroff was responsible for securing the exclusive rights to The Joe Rogan Experience podcast, among other high-profile names.
“Because of her efforts, Spotify grew our podcast content by 40x, drove significant innovation in the medium, and became the leading music and podcast service in many markets,” Ek said.
Spotify joins a long and quickly growing list of tech companies laying off thousands of staff members with each passing day in the new year: Meta, Microsoft, Twitter, Vimeo, Lyft, Amazon, Salesforce, Google and Microsoft.
Spotify’s stock jumped over 2% on Monday following the announcement.
