Swedish music streaming large Spotify stated Monday it was planning to chop 6% of its roughly 10,000 workers, including to a glut of layoffs within the expertise sector as firms put together for a attainable recession.
The firm additionally stated its chief content material and promoting business officer, Dawn Ostroff, will depart as a part of a broader reorganization.
Spotify Chief Executive Daniel Ek introduced the restructuring in a message to workers that was additionally posted on-line.
“To bring our costs more in line, we’ve made the difficult but necessary decision to reduce our number of employees,” Ek wrote.
“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,” he stated.
Spotify, which had about 9,800 full-time workers as of Sept. 30, stated it expects to incur about 35 million euros ($38.06 million) to 45 million euros in severance-related expenses.
“I take full accountability for the moves that got us here today,” Ek added.
Shares within the firm rose 3.5% in premarket buying and selling.
The Swedish firm, which is listed on the New York Stock Exchange (NYSE), has invested closely since its launch to gas development with expansions into new markets and, in later years, unique content material equivalent to podcasts.
Spotify has by no means posted a full-year internet revenue regardless of its success within the on-line music market.
Spotify’s transfer comes at a time when tech firms are going through a requirement downturn after two years of pandemic-driven development throughout which that they had employed aggressively. That has led the likes of Google father or mother firm Alphabet, Facebook-owner Meta, Amazon and Microsoft to announce tens of 1000’s of job cuts, because the sector faces financial headwinds.
Spotify has seen advertisers pull again on spending, mirroring a pattern seen at Meta and Google father or mother Alphabet, as speedy rate of interest hikes and the fallout from the Russia-Ukraine battle strain the economic system.
The firm had stated in October that it might decelerate hiring for the remainder of the yr and into 2023. Its shares greater than halved in a dismal 2022 for tech shares.
