UPDATED: Spotify plans to cut 6% of its staff

As part of larger cost-cutting measures, Spotify will reduce its headcount by around 6%, according to a statement from CEO Daniel Ek to employees on Monday.

“To offer some perspective on why we are making this decision, in 2022, the growth of Spotify’s OPEX outpaced our revenue growth by 2X. That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap. 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. So while it is clear this path is the right one for Spotify, it doesn’t make it any easier—especially as we think about the many contributions these colleagues have made,” said Daniel Ek.

As well as healthcare during the severance period, immigration support, and career support, the affected employees will receive approximately 5 months of severance, which “will be calculated based on local notice period requirements and employee tenure”.

As of September 30, Spotify employed roughly 9,800 full-time workers. The company stated that it anticipates severance-related costs to range from 35 million euros ($38.06 million) to 45 million euros.

Original Post (January 23, 2023, 8:53 am): Spotify to start laying off employees this week -Bloomberg

After Amazon, Microsoft and Google’s parent Alphabet, audio streaming giant Spotify is now planning to reduce its workforce in an effort to cut its expenses, sources familiar with the matter told Bloomberg.

While the number of employees that will be affected by the move is not known yet, the company is set to start the layoffs as soon as this week, the sources added.

The report comes just days after Google’s parent company Alphabet announced that it would lay off around 12,000 roles, which account for 6% of its workforce. ShareChat, a Google-backed Indian social media company, also laid off 20% of its staff last Monday.

In addition, Microsoft confirmed last Wednesday that it would eliminate 10,000 roles, or about 5% of its workforce, by the end of the third quarter of fiscal 2023.

And Amazon employees also started the new year with layoff news after CEO Andy Jassy said that they would cut more than 18,000 roles, 1.2% of the tech giant’s global workforce.

After employing thousands of people to meet rising consumer demand during the pandemic, big tech companies are now announcing their layoff news one by one citing the post-pandemic economic uncertainty.

But big tech layoffs didn’t start in 2023. According to data from Layoffs.fyi, more than 150,000 staff were laid off in 2022. Meta, Twitter, Snap, Shopify, Niantic and Robinhood are among the companies that either reduced their workforce or announced hiring freezes last year.