Spotify is slicing nearly 1,600 jobs because the music streaming service blamed a slowing economic system and better borrowing prices within the newest spherical of redundancies at massive tech firms.
Daniel Ek, Spotify’s billionaire founder and chief govt, revealed that the corporate had determined to chop 17% of its workforce, the third and steepest spherical of redundancies of 2023.
Ek advised workers they might obtain a calendar invitation “throughout the subsequent two hours from HR for a one-on-one dialog” in the event that they had been affected by the cuts, in a message to workers revealed on Spotify’s web site on Monday.
Large tech firms starting from Meta and Microsoft to Amazon and Alphabet have retrenched and made large-scale redundancies throughout 2023 after rates of interest rose and traders targeted on their skill to chop prices to guard earnings.
Stockholm-based Spotify is the dominant participant in world music streaming, and is among the few European firms to tackle US rivals. But as the worldwide economic system’s momentum has waned, it has held again from its earlier heavy funding into podcasting. That funding included backing a podcast from Prince Harry and the Duchess of Sussex in a deal that led to obvious acrimony this 12 months. Spotify continues to keep up high-value podcasting tie-ups, together with a controversial take care of Joe Rogan and others with the influencer Emma Chamberlain and the comic Trevor Noah.
Ek stated Spotify had taken benefit of low-cost borrowing throughout 2020 and 2021, when central bankers lower rates of interest sharply in response to coronavirus pandemic lockdowns, however that “we now discover ourselves in a really completely different surroundings”.
“Regardless of our efforts to cut back prices this previous 12 months, our price construction for the place we have to be continues to be too massive,” he wrote.
Spotify reported that it had 9,400 workers on the finish of the third quarter of 2023. It had already in the reduction of worker numbers by 6% in January and by an additional 2% in June.
Redundant workers will obtain a mean of 5 months of severance pay plus unused vacation pay, Ek stated.
“Embracing this leaner construction will even enable us to speculate our earnings extra strategically again into the enterprise,” he added. “As we speak is a tough however essential day for the corporate.”