Yahoo Finance Spotify slashes 6% of workforce after revenue growth slows
Spotify has slashed 6% of its global workforce after the firm said its operational costs outpaced its revenue growth.
The music streaming service said it would begin holding one-to-one conversations with affected employees, who will receive 5 months of severance pay on average.
The firm said the move was part of a restructuring aimed at driving more efficiency, controlling costs, and speeding up decision-making,
Spotify boss Daniel 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.”
The Stockholm-based company has 6,600 employees, according to its most recent annual report, implying as many as 400 workers were set to be laid off as part of the move.
Spotify has 671 employees in the UK, according to a report filed with Companies House, which would mean 40 staff would be let go if employee headcount were cut by 6% in Britain. A Spotify spokesperson was unable to comment over the precise number of UK layoffs.
The announcement makes Spotify the latest tech firm to let go of swathes of employees amid a slump in consumer sentiment, following the likes of Amazon, Microsoft and Google who made similar moves earlier this month. There have been over 55,000 layoffs at tech firms since the beginning of January, according to tracking site Layoffs.fyi.
Last week, the firm wrote to the European Union competition commissioner demanding urgent regulatory action against Apple after complaining that it was being ‘hampered’ by the California-based tech giant.
The tech firm accused Apple of causing “immeasurable” harms to consumers and developers and of having made “capricious changes to terms and conditions” as a result of its “monopoly position” in a letter to Margrethe Vestager, Executive Vice President of the European Commission.
The letter, which was co-signed with a number of tech firms including email business Proton and music streaming service Deezer, said: “For years, Apple has imposed unfair restrictions on our businesses. These restrictions hamper our development and harm European consumers.
“Apple has and continues to defy every effort from courts and regulators to address these unfair practices. While Apple continues to reap unfair rewards, the harm to developers and, more importantly, to consumers is immeasurable.”
Founder Daniel Ek controls a stake in the business worth $1.5 billion, regulatory filings show.
