Music Streamer Spotify To Cut Workforce By 17%
04.12.2023 - 10:15
/ deadline.com
Music streaming service Spotify will cut about 17% of its global workforce, becoming the latest big tech company feel the bite of the economy.
The figure represents around 1,500 of the Sweden-based streamer’s 9,000 staff, as is the result of economic growth slowing “dramatically,” according to Spotify CEO Daniel Ek. Back in January, Spotify said it would cut staff by 6% and announced a hiring slowdown in October, but this move to reduce costs goes much deeper.
However, Ek claimed today’s decision was “not a step back” but “a strategic reorientation.” The New York Stock Exchange-listed company expects to incur costs of at least €35M ($38M) on severance charges.
Ek is not the first chief exec of his kind to choose deep cuts in recent times. Alphabet, Amazon, Microsoft, Meta, X and Roku have all enacted tough redundancy programs reorganize their their businesses for various reasons, most relating to the media environment that’s developed after the pandemic, during which tech and digital media companies invested huge sums to capitalize on increased usage of their products.
“Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future,” wrote Ek.
“While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.”
Despite the challenges facing digital media companies, the news will hit staff hard, as the company’s third quarter financial results revealed it had stemmed