Tech

Spotify to cut 6% of jobs due to latest wave of tech layoffs

What happened now? In a memo posted on Spotify’s website, CEO Daniel Ek said they have made the decision to cut staff by about six percent across the company. Ek said that Spotify has made great strides in making the company run faster, but added that they also need to be efficient.

Spotify has become the latest tech company to announce organizational changes that have led to significant job cuts.

Like many in the tech sector, Spotify has grown and invested heavily during the pandemic. Last year, Spotify’s operating expenses doubled its revenue growth. As Ek noted, this is unsustainable in the long run in any climate, but especially in the current difficult macroeconomic conditions.

In retrospect, Ek said he was too ambitious in investing before the earnings growth. “I take full responsibility for the actions that brought us here today,” Ek said.

All affected employees will receive severance pay, with the average employee receiving about five months of pay depending on metrics such as tenure and local notice period requirements. All accrued and unused vacation time will also be paid, and departing employees will continue to receive medical insurance for the period of separation. What’s more, everyone will be eligible for two months of employment services to help find a new job, while those whose immigration status is related to their work will receive support from Human Resources and Mobility Teams.

A spokesperson for Spotify told The Wall Street Journal that the layoffs would affect roughly 600 employeesand are not targeted at a specific department.

Ek also announced several management changes. In particular, the director of content and advertising Don Ostroff decided to leave the company. Under her leadership, Spotify has grown 40 times the number of podcasts and more than doubled its ad revenue.

Despite job cuts, Ek said he is confident 2023 will be filled with a steady stream of innovation, unlike anything they’ve introduced in the past few years. Perhaps Spotify HiFi is finally making its debut?

Image credit: Thibault Penen, Studio Glazetics


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