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Follow the wave of layoffs in technology: Spotify cuts 6% of its staff

There are about 600 jobs.

Spotifythe world leader in audio platforms, announced on Monday that it will cut 6% of its workforce, that is, some 600 jobs, thus joining the wave of layoffs among the technology giants.

This is the largest staff cut in the history of this Swedish company founded in 2006 in Stockholm and which reached more than 500 million subscribers. The announcement comes after Microsoft cut 10,000 jobs and Google 12,000.

“In retrospect, I have been too ambitious investing faster than our turnover growth,” company CEO and co-founder Daniel Ek, 39, said in an online message to employees.

“For this reason, we reduce our staff by around 6% in the entire group,” explained its director.

Spotify is listed on the New York Stock Exchange and at its open on Monday, shares rose 4.6% to $97.91.

“In the next few hours, individual interviews will be held with the affected employees,” Ek explained.

Although Spotify has been occasionally profitable, the company used to post losses for several yearsdespite the lightning growth in its number of subscribers and the advantage it gains over its competitors, such as Apple Music.

The company will publish its annual results on January 31.

“As you know, we have made a considerable effort in recent months to reduce our costs, but it just hasn’t been enough“Ek added.

According to the Scandinavian billionaire, Spotify’s investments grew twice as fast as its revenue last year.

“In the long term it would be unfeasible in any context, but in a difficult environment at the macroeconomic level, it will be even more difficult to cover the hole,” he stressed.

millionaire investments

The company had rapid growth and cannot sustain the jobs. AFP photo

In recent years, Spotify has also invested more than one billion euros in the podcast industry, in which it has become a world leader. But the benefits of this investment are still unknown, according to analysts.

Betting on this audio format also brought him controversy, such as when American star Joe Rogan was accused of spreading false news on his shows.

At the end of September, the platform had about 456 million subscribers. A part, 195 million, pay for the service. The group aspires to have one billion users by 2030.

Its annual turnover reached 9,600 million euros in 2021 [10.400 millones de dólares] –most of it coming from paying subscribers– and the number of employees tripled in five years to reach 9,800 at the end of September.

Spotify’s announcement follows a series of layoff plans announced by big tech groups in recent weeks.

Following layoffs at Amazon, Meta and Microsoft, Google announced on Saturday that it will cut 12,000 jobs worldwide, that is, more than the 6% of its troops. On Wednesday, Microsoft announced that it would make 10,000 layoffs by April.

After what Elon Musk to buy Twitterat the beginning of November 2022, the social network launched a forceful cut plan that affected half of its 7,500 workers.

To finance the purchase, which cost 44,000 million dollars, the billionaire borrowed heavily from the company, whose accounts were already weak, since it registered a significant deficit in the first two quarters of 2022.

The environment is thus shaken by a huge number of employees who are left without their jobs.

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