Spotify is shedding 17 % of its staff in an try to chop prices, its CEO Daniel Ek introduced to employees at this time. Based mostly on its whole headcount of 9,241 revealed throughout its final earnings launch, the cuts are anticipated to impression over 1,500 individuals.
In a memo despatched to employees, Ek mentioned slowing financial development and rising prices have been in charge for the cuts, which he mentioned would make Spotify a leaner firm. “Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” Ek wrote. “As we’ve grown, we’ve moved too far away from this core principle of resourcefulness,” he later added.
“As we’ve grown, we’ve moved too far away from this core principle of resourcefulness”
These layoffs have come after Spotify’s headcount elevated considerably in the course of the pandemic, with its headcount almost doubling up to now three years, The Wall Avenue Journal notes. In his memo, Ek defended his resolution to develop the group all through that interval, however mentioned that “we now find ourselves in a very different environment.”
Workers impacted by Spotify’s newest layoffs will obtain round 5 months of severance pay in response to Ek’s memo, throughout which period the corporate will proceed to cowl their healthcare.
Spotify has typically prioritized development over quarterly earnings all through its historical past, however the WSJ notes that traders have been more and more pushing for profitability over the previous 12 months. Ek mentioned at an investor day final 12 months that he intends for Spotify to be worthwhile by 2024. Though the corporate posted a quarterly revenue in its final earnings launch, the WSJ notes that it reported losses of €462 million (round $502 million) within the first 9 months of this 12 months.
