The transfer is a part of a wider pattern as tech firms search financial savings amid a slower-than-expected economic system.
Spotify has introduced a 3rd main spherical of workers cuts this yr.
The music streaming big stated on Monday that it’s going to lay off about 1,500 workers, or 17 % of its headcount, to deliver down prices. The announcement follows the discharge of 600 workers in January and an extra 200 in June.
The transfer matches with a rising pattern within the tech sector, with financial situations remaining extra sluggish than anticipated. Following a spherical of redundancies at the beginning of the yr, firms together with Amazon and Microsoft-owned LinkedIn have introduced additional reductions not too long ago.
In a letter to workers, Spotify CEO Daniel Ek stated the corporate employed extra in 2020 and 2021 as a result of decrease price of capital and whereas its output has elevated, a lot of it was linked to having extra assets.
Spotify invested greater than $1bn to construct up its podcast enterprise, signed up celebrities comparable to Kim Kardashian, Prince Harry and Meghan Markle and expanded its market presence throughout the globe in a quest to achieve a billion customers by 2030.
It presently has 601 million customers, up from 345 million on the finish of 2020.
Five months of severance pay
Ek stated the discount will really feel massive given a current optimistic earnings report that noticed the corporate report a revenue within the third quarter, and its ongoing efficiency, together with hitting its viewers goal of 601 million customers early.
However, he famous that the beneficial properties have been due primarily to the expanded assets.
“By most metrics, we were more productive but less efficient. We need to be both,” he stated.
The firm will begin informing affected workers on Monday. They will get about 5 months of severance pay, trip pay, and healthcare protection for the severance interval.
The firm may even supply immigration assist to workers whose immigration standing is linked with their employment.
“We debated making smaller reductions throughout 2024 and 2025,” Ek stated.
“Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives,” he added.
https://www.aljazeera.com/economy/2023/12/4/spotify-announces-another-round-of-major-job-cuts?traffic_source=rss
