Spotify is the umpteenth technology company to carry out massive layoffs. The Swedish music streaming giant is laying off 6% of its global workforce.
The layoffs were announced directly by Spotify CEO Daniel Ek in a memo to staff. Spotify has around 9,800 full-time employees according to its latest financial reports, meaning the layoffs will affect fewer than 600 employees.
In his announcement, Ek said the layoff decision was part of an organizational restructuring aimed at increasing efficiency, reducing expenses, and speeding up policy making.
"Like other leaders, I look forward to sustaining the high winds of the pandemic and trust that our global business and lower risk of a weakened advertising impact will protect us," Ek wrote in his announcement, as quoted by The Verge, Tuesday (24/1/ 2023).
"In hindsight, I was too ambitious in investing before growing our revenue. I take full responsibility for the steps that got us here."
Spotify employees affected by the layoffs will receive severance pay for five months. Allotted leave that has been collected will also be paid, and health insurance will continue in line with severance pay.
Not only ordinary employees, Spotify executives have also been affected by this layoff. He is Spotify's Content and Ad Business Chief Dawn Ostroff, who Ek said has succeeded in boosting Spotify's podcast content up to 40 times.
Even though Spotify is the largest music streaming service in the world, they are more concerned with growth than profits. In recent years, Spotify has invested heavily in podcast and audiobook content to attract new users to its platform.
According to its latest financial report, Spotify has 195 million premium subscribers and 456 million monthly active users. Last year Spotify reported revenue of 3 billion Euros, with 2.7 billion Euros coming from premium subscribers and 385 million Euros from advertising.
The layoffs at Spotify follow several other technology companies that have already announced cuts in the number of employees. Last week Google announced it would cut 12,000 jobs. Other technology companies that have also made layoffs include Amazon, Meta, Twitter and Microsoft.
