Swedish audio streaming giant Spotify is laying off 600 employees, or 6 per cent of its workforce in a sign of persistent worries about economic headwinds joining a growing list of big tech companies to cut costs.
CEO Daniel Ek revealed the firm’s plans in a blog post that the company had made a "difficult but necessary decision" to slash various roles. Ek also said he took full responsibility for the layoffs.
“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,” Ek said in the note to employees on Monday.
The company had more than 9,800 employees at the end of the third quarter, according to regulatory filings.
The music and podcast platform became the latest technology company to reduce headcounts to keep expenses under check.
The layoffs at Stockholm-based Spotify are largely due to macroeconomic challenges, Ek said in the note.
“I was too ambitious in investing ahead of our revenue growth,” he wrote.
The company is offering employees about five months of severance pay and health care in addition to career counseling services. Spotify will incur 35 million to 45 million euros in severance costs, the company said in a filing with the Securities and Exchange Commission.
Ek also announced some changes among Spotify’s executives as part of an effort to “restructure our organisation.” Dawn Ostroff, the company’s Chief Content and Advertising Officer, has been asked to leave. A veteran television and video executive, she was hired in 2018 as Spotify searched for ways to expand its offerings beyond music.
The firm’s restructuring plan also necessitated Alex Norstrom, Chief Business Officer, and Gustav Soderstrom, Chief Research and Development Officer, to accept roles as Co-Presidents.
The new year has brought worries to the job market which showed signs of tougher times since October 2022. Last week, Alphabet, Google’s parent company slashed 12,000 employees, and Microsoft let go of 10,000.
Media houses are also not immune to the trend. In December, The Washington Post told employees that there would be layoffs at the company.
Media companies have also been trimming their workforces. Vox Media cut 7 per cent of its staff on Friday.