Spotify is shedding 17 % of its workers in an effort to chop prices, CEO Daniel Ek introduced to workers as we speak. Based mostly on the entire workforce of 9,241 revealed over the past earnings launch, the cuts are anticipated to have an effect on greater than 1,500 individuals.
In a memo to workers, Ek mentioned slowing financial development and rising prices had been accountable for the cuts, which he mentioned would make Spotify a leaner firm. “In the present day we nonetheless have too many individuals devoted to supporting work and even doing work round work as a substitute of contributing to alternatives with actual impression,” Ek wrote. “As we have now grown, we have now moved too removed from this core precept of ingenuity,” he later added.
“As we have now grown, we have now moved too removed from this core precept of ingenuity”
These layoffs come after Spotify’s workforce elevated considerably through the pandemic, practically doubling its workforce over the previous three years. The Wall Road Journal notes. In his memo, Ek defended his resolution to develop the workforce throughout that interval, however mentioned that “we at the moment are in a really completely different surroundings.”
Staff affected by Spotify’s newest layoffs will obtain roughly 5 months of severance pay, throughout which era the corporate will proceed to cowl their well being care, based on Ek’s memo.
Spotify has typically prioritized development over quarterly income all through its historical past, however the… WJ notes that traders have more and more pushed for profitability over the previous yr. Ek mentioned at an investor day final yr that he plans for Spotify to be worthwhile by 2024. Though the corporate posted a quarterly revenue in its final earnings launch, WJ notes that it reported losses of €462 million (about $502 million) within the first 9 months of this yr.
