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Spotify cuts almost 1,600 jobs amid rising costs

Spotify is slicing almost 1,600 jobs because the music streaming service blamed a slowing economic system and better borrowing costs within the newest spherical of redundancies at large tech corporations.

Daniel Ek (pictured), Spotify’s billionaire founder and chief government, revealed that the corporate had determined to chop 17% of its workforce, the third and steepest spherical of redundancies of 2023.

Ek informed workers they’d obtain a calendar invitation “within the next two hours from HR for a one-on-one conversation” in the event that they have been affected by the cuts, in a message to employees revealed on Spotify’s web site on Monday.

Big tech corporations starting from Meta and Microsoft to Amazon and Alphabet have retrenched and made large-scale redundancies throughout 2023 after rates of interest rose and traders targeted on their capacity to chop costs to guard earnings.

Stockholm-based Spotify is the dominant participant in world music streaming, and is without doubt one of the few European corporations to tackle US rivals. Yet as the worldwide economic system’s momentum has waned, it has held again from its earlier heavy funding into podcasting. That funding included backing a podcast from Prince Harry and the Duchess of Sussex in a deal that resulted in obvious acrimony this yr. Spotify continues to take care of high-value podcasting tie-ups, together with a controversial take care of Joe Rogan and others with the influencer Emma Chamberlain and the comic Trevor Noah.

Ek mentioned Spotify had taken benefit of low cost borrowing throughout 2020 and 2021, when central bankers reduce rates of interest sharply in response to coronavirus pandemic lockdowns, however that “we now find ourselves in a very different environment”.

“Despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big,” he wrote.

Spotify reported that it had 9,400 workers on the finish of the third quarter of 2023. It had already reduce worker numbers by 6% in January and by an additional 2% in June.

Redundant workers will obtain a mean of 5 months of severance pay plus unused vacation pay, Ek mentioned.

“Embracing this leaner structure will also allow us to invest our profits more strategically back into the business,” he added. “Today is a difficult but important day for the company.”

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