Tuesday, January 24, 2023
Spotify is the latest tech titan to confirm employee layoffs.
The Swedish streaming service today announced plans to terminate some 6% of workers across the company. In an effort to bring costs "more in line," the firm made the "difficult but necessary" decision to reduce its staff, says CEO Daniel Ek.
It's unclear which departments are on the chopping block, but all impacted employees can expect approximately five months of severance pay and all accrued and unused vacation time paid out. Spotify will also continue to cover healthcare and immigration support, as well as offer two months of outplacement services.
"I understand that with our historic focus on growth, many of you will view this as a shift in our culture," Ek wrote in a company-wide memo. "But as we evolve and grow as a business, so must our way of working while still staying true to our core values."
Like many other tech companies, Spotify's post-pandemic operating expenses outpaced its revenue growth—which is less than ideal any day of the week, but especially so in what Ek calls "a challenging macro environment."
"I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us. In hindsight, I was too ambitious in investing ahead of our revenue growth," the CEO said. "I take full accountability for the moves that got us here today."
It's a familiar refrain for people in the tech industry of late. Microsoft this week announced it would lay off 10,000 people, while Google parent Alphabet is cutting 12,000 employees. Last year, Meta axed 11,000 workers, while Amazon recently confirmed that layoffs it announced last year would affect approximately 18,000 employees. Despite claims of taking responsibility for their failures, though, the CEOs of these companies all still have their jobs.
Ek, meanwhile, also confirmed shake-ups at Spotify's executive level, including the departure of Chief Content Officer and Advertising Business Officer Dawn Ostroff. Since joining the team in August 2018, Ostroff helped usher in a new wave of podcasting, inking exclusive deals with the Obamas, Kim Kardashian West, Joe Rogan, Prince Harry, and Meghan Markle.
Copyright © 2019 CST, Inc. All Rights Reserved