Spotify is the latest tech giant to make significant reductions in its workforce.
CEO Daniel Ek has today announced that the streaming company’s employee base is being reduced by about 6% - or almost 600 of the staff. Last year Spotify reported that it had a headcount of 9,800.
It follows a series of lay-offs in the tech sector in anticipation of a recession and reduced advertising spending.
As part of a wider Spotify reorganisation, chief content and advertising business officer Dawn Ostroff will exit the company.
In a note to staff, Daniel Ek said the company needed to re-focus on efficiency during a challenging economic period. Spotify will be centralising engineering and product work under Gustav Söderström as chief product officer, and the business areas under Alex Norström as chief business officer.
Explaining the planned reduction in the workforce, Ek said: “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.”
Last October, Spotify said it would reduce hiring for the rest of the year and into 2023.
Ek also shared his outlook for the company ahead of its next set of quarterly results on January 31.
“In almost all respects, we accomplished what we set out to do in 2022 and our overall business continues to perform nicely,” he said. “But 2023 marks a new chapter. It’s my belief that because of these tough decisions, we will be better positioned for the future. We have ambitious goals and nothing has changed in our commitment to achieving them.
“We’ve come a long way in our efforts to build a comprehensive platform for creators of all levels, but there’s still much to be done. To truly become the go-to destination for creators, we need to keep improving our tools and technology, explore new ways to help creators engage with their audiences, grow their careers, and monetise their work.
“In fact, looking at our roadmap, with the changes we are making and what we have planned to share at our upcoming Stream On event, I’m confident that 2023 will be a year where consumers and creators will see a steady stream of innovations unlike anything we have introduced in the last several years. I will share more about these exciting developments in the coming weeks.”