Spotify Cuts Hundreds Of Jobs
Music streaming giant Spotify will axe 6 per cent of its 10,000 strong workforce, the latest casualties in a long stream of tech redundancies.
“In hindsight, I was too ambitious in investing ahead of our revenue growth,” CEO Daniel Ek admitted when announcing the cuts, which are expected to number around 600.
In a note to employees, Ek wrote: “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. So while it is clear this path is the right one for Spotify, it doesn’t make it any easier—especially as we think about the many contributions these colleagues have made.
“Like many other leaders, 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. And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today.”
The Swedish company said the downsizing will cost A$52.8 million in severance-related charges.
Spotify also announced an executive reshuffling, with Gustav Söderström and Alex Norström joining Ek as co-presidents, with Söderström also serving as chief product officer, and Norström aschief business officer. Chief content officer and advertising business officer Dawn Ostroff will leave the company.
Spotify may be the leader in the music streaming market, but it has never turned a profit in its 15 years.
Shares rose 6 per cent after the news.